The former high commissioner to the UK Sir Lockwood Smith says Liz Truss' mini-budget was badly timed and lacked "preparation".
It comes after Truss sacked her chancellor and u-turned on a major economic policy, 39 days into being Prime Minister.
Truss told media on Friday (local time) parts of her Government's mini-budget "went further and faster than the markets were expecting".
"So the way we are delivering our mission right now has to change."
Sir Lockwood told AM he knew Truss "really well" and is a woman of "serious experience", but said she got the timing of her mini-budget wrong.
"The mistakes she made, in my humble opinion, is she didn't prepare the markets for some of the policies she proposed and that's caused huge trouble."
Truss' now axed tax plan would've seen a cut to the UK's highest rate of income tax. Sir Lockwood told AM amid the cost of living crisis it's "difficult" to argue for tax cuts.
He doubled down, telling AM that the timing was "really bad".
"It saddens me because as I say Liz Truss is a very competent, capable person, a good person. But it's certainly damaged her credibility right now."
Sir Lockwood couldn't say whether Truss could survive her policy blunder, but said from the outside the damage looks "severe".
"Whether Liz will pull through this, I honestly do not know."
Watch the full interview above.
