The new British leader will be tasked by the Queen with the task of forming a new government, which is expected to be announced in the course of next Tuesday afternoon.
Liz Truss took up the post of Prime Minister of the United Kingdom on Tuesday. Among the challenges it faces are rising energy bills, a looming recession and industrial conflict.
Truss, the fourth Conservative Prime Minister in six years, flew to Balmoral Castle, the Scottish residence of the Royal Family, where Queen Elizabeth has formally instructed him to form a new cabinet. Truss, who defeated Rishi Sunak in the Conservative Party primaries on Monday, will replace Boris Johnson as head of the country after three tumultuous years in office.
“Mrs Truss accepted Her Majesty’s offer and kissed her hand on her appointment as Prime Minister and First Lord of the Treasury,” Buckingham Palace said.
The former foreign secretary, 47, will address the nation from Downing Street on Tuesday afternoon before naming her government. Johnson urged the country and his deeply divided party to rally behind the new leader.
Truss is inheriting an economy in crisis, with double-digit inflation, rising energy costs and the Bank of England warning of a prolonged recession by the end of this year. Workers across the economy have already gone on strike.
His plan to revive growth through tax cuts while providing around £100bn for energy has shocked financial markets, causing investors to ditch the pound and government bonds in recent weeks.
After eight years in the cabinet of prime ministers, Truss defeated his rival Rishi Sunak in a vote of members of the Conservative Party by a narrower margin than expected, with more party lawmakers initially backing his rival.
Johnson, who tried to stay in power in July despite massive resignations of ministers over a string of scandals, told journalists and politicians gathered in Downing Street on Tuesday that the country must come together.
“These are all people,” he said in his farewell address. “What I’m saying to my fellow Conservatives is that it’s time for politics to stop, folks. It’s time we all support Liz Truss, her team and her show.”
Johnson used his farewell address to boast of his successes, including an early vaccine program during the pandemic crisis and his staunch support for Ukraine in its fight against Russia. He also cited “delivering Brexit” as one of his most significant achievements.
Britain, which has been under Conservative government since 2010, has bounced from crisis to crisis in recent years and there is now the prospect of a protracted energy emergency that could take away savings from households and the future of businesses still be burdened by pandemic-era loans.
Household energy bills are expected to rise 80% in October, but a source familiar with the situation told Reuters Truss that bills could freeze in a plan that could cost around £100 billion. It is not clear how Britain will pay for the aid, but government borrowing is likely to increase.
The size of the package, coupled with the fact that the energy crisis could last for a few years, has scared investors.
The pound has recently outperformed most other major currencies against the US dollar. In August alone, the pound lost 4% against the dollar and was the worst month for 20-year UK government bonds since about 1978, according to data from Refinitiv and the Bank of England.
Britain’s public finances also continue to suffer from a huge surge in government spending due to the coronavirus. Public debt as a percentage of economic output is not far from 100%, compared to 80% before the pandemic.
Source: La Verdad
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