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Liz Truss has taken her place in history, for the time being, as the shortest serving UK Prime Minister, and Rishi Sunak has already struck a sombre tone in his statements on the outlook for the UK.
The UK’s reputation for economic and political stability is in tatters. The recent International Monetary Fund (IMF) intervention underlines that the UK is no longer a great power on a global financial basis and the UK authorities have been reminded that their capacity to steer a lone path on economic matters is beyond them.
We now have political stability, at least for a period of time, and we hope that this can calm the markets. Mr Sunak’s construction of a diverse cabinet from across the party draws on experienced politicians and some key areas of continuity – such as Jeremy Hunt retaining his role and Michael Gove returning to his “Secretary of State for Levelling Up” role.
Should Sunak deal in miracles, this would not be the first time that the conservatives have come back from the brink – if indeed they are able to. We should not forget that the conservative party is the oldest and most successful political party in the UK. Time and time again, in fact, the party has found itself ideologically stuck and electorally beaten, only for voters to forgive and forget when, as inevitably happens, “the other lot” eventually mess up. True, that nearly always requires some time out of office as well as a new leader (or three).
The move to push back the autumn fiscal statement to the 17th November does sound sensible to ensure that the previous mistakes of a hastily announced fiscal plan shaking market confidence, however the Bank of England are due to make a further interest rate decision on Thursday 3rd November. I am sure they would rather have had time to digest the new fiscal plan prior to their announcement. Since Jeremy Hunt repealed the majority of Kwasi Kwarteng’s tax cuts the expectations of a 1% rate rise next week have been reduced to a likely 0.75%. In his first Prime Ministers questions, Mr Sunak backed Jeremy Hunt with a message that emphasised how the Government will need to “take difficult decisions to restore economic credibility”, adding that he would protect the most vulnerable and restore this credibility in a fair and compassionate way. A solid start, just what was required, and I am sure that there are interesting times ahead.
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