NewsThe third time's the charm? Rishi Sunak vows to...

The third time's the charm? Rishi Sunak vows to right Liz Truss' 'wrongs'

The third time’s the charm? British Conservative Rishi Sunak was appointed prime minister on Tuesday, his third this year after Boris Johnson and the short-lived Liz Truss , promising to correct the “mistakes” that aggravated the economic crisis, which will require “difficult decisions”.

This 42-year-old billionaire ex-banker, the grandson of Indian immigrants, comes to power at a difficult time.

The United Kingdom is facing an economic and social crisis aggravated by Truss’s ultra-liberal plans in times of extremely high inflation, the fracture of the Conservative Party that continues to deepen since the Brexit referendum in 2016 and the need to convince of his legitimacy as head of government .

“I fully understand how difficult things are,” he said as he left the prime minister’s Downing Street residence, where he eschewed the usual tradition of standing with his family and cheering on his political supporters.

“I also understand that I have to work to restore confidence, after everything that has happened. All I can say is that I am not intimidated. I know the high position that I have accepted and I hope to live up to its demands,” he said. .

Truss made “some mistakes,” he acknowledged in his first speech outside the door of 10 Downing Street. “I have been elected as the leader of my party and its prime minister in part to solve them and that work begins immediately,” he said.

He promised to put “economic stability and confidence at the center of this government’s program”, but warned that for this “difficult decisions will have to be made”, raising fears of upcoming budget cuts and tax increases.

Sunak, one of the richest men in Parliament, is expected to cut spending to plug an estimated 40 billion pound ($45 billion) hole in public finances, created by an economic slowdown, rising loans and an energy support plan.

With his party’s popularity in freefall, he will face mounting calls for an election if he strays too far from the promises that helped elect the Conservative Party in 2019, when then-leader Boris Johnson pledged to make big investments.

His arrival in power seemed to reassure markets in turmoil for weeks: the pound soared 1.18% against the dollar.

Economists and investors have welcomed Sunak’s appointment – Ryanair boss Michael O’Leary said the adults were back in charge – but warn he has little choice in fixing the public finances of a country where millions of people are struggling with a cost of living crisis.

financial turmoil

Sunak, Britain’s youngest prime minister in more than 200 years and its first non-white leader, succeeded Truss, who resigned after 44 days following a “mini-budget” that sparked turmoil in financial markets.

Carlos III received before the resignation of Truss, 47, who was forced to resign on Thursday, due to the pressure of the markets and his party, due to the financial chaos that he caused with his controversial fiscal policies after only seven weeks in the position.

“I wish Rishi Sunak every success for the good of our country,” Truss said in a brief speech.

The new head of government is due to name his team on Tuesday. Finance Minister Jeremy Hunt, appointed 11 days ago, could keep the portfolio.

Sunak will have to review all spending, including in politically sensitive areas such as health, education, defense, welfare and pensions.

In his first speech as prime minister, before hundreds of journalists gathered in Downing Street, he struck a more sober tone than his predecessors, Truss and Johnson.

He paid tribute to Truss, saying his plan to revive economic growth had not been wrong, but said mistakes had been made: “And I have been elected as the leader of my party and its prime minister, partly to fix them.”

As Truss left office, applauded by her colleagues and staff, she struck a defiant tone and made no apologies for the market turmoil that accompanied her seven weeks as prime minister, when the pound tumbled and lending rates plummeted. and mortgages skyrocketed.

Sunak will now start assembling his cabinet, which some Conservative lawmakers hope will include politicians from all wings of the party.

He is expected to keep Jeremy Hunt as Chancellor of the Exchequer after he helped calm volatile bond markets by scrapping most of Truss’s economic program.

Investors will also want to know if Sunak is still planning to release a new budget along with borrowing and growth forecasts on Oct. 31, which would help a more informed Bank of England rate decision on Nov. 3.

political crisis

In addition to the economic crisis, which may see the United Kingdom shaken by strikes this winter, and the internecine struggles between the Conservatives, Sunak will have to establish his legitimacy before a public opinion that did not vote for him.

The Conservative Party won an overwhelming legislative majority under Johnson in 2019, the largest for the British right in 40 years.

But since then the country has changed its prime minister twice. The first time, with Truss, through a vote involving only some 170,000 party members. The second, with Sunak, thanks only to the support of some 200 of the 357 conservative deputies.

In this context, 62% of British voters, in a country of 67 million inhabitants, want early legislative elections to be called before the end of the year, according to an Ipsos survey.

The next elections are scheduled for January 2025 at the latest. The opposition Labor Party has a huge lead in the polls but cannot force an advance on its own and is unlikely to win the support of Conservative rebels who would see their seats in jeopardy.

Sunak assured his bench on Monday that he will not advance the elections. And on Tuesday he defended that “the mandate obtained by the party in 2019 is not the private property of a single individual”, in reference to Johnson. “It is a mandate that belongs to us and unites us,” he said, promising to fulfill that electoral program.

With information from AFP and Reuters

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