West News Wire: For the first time since assuming office, UK Prime Minister Rishi Sunak has appeared before the opposition in the House of Commons to reassure them that his new administration will bring economic stability and continuity following the market upheaval that his predecessor’s tax-cutting measures caused.
As he attempts to address Britain’s numerous economic issues, Sunak, who took office on Tuesday, has picked a government that combines allies with seasoned ministers from the administrations of his two immediate predecessors, Liz Truss and Boris Johnson.
One of his administration’s first moves was to postpone a crucial economic report until November 17 in the hopes that it would provide more precise estimates as the government works to address the cost-of-living crisis.
“We will have to take difficult decisions to restore economic stability and confidence,” Sunak told lawmakers during his first Prime Minister’s Questions (PMQs) session. “We will do this in a fair way. I will always protect the most vulnerable. We did that in COVID, and we will do that again.”
Opposition politicians focused on the baggage his new government carries: ministers from the cabinets of Johnson, who quit in July after a slew of ethics scandals, and Truss, whose government lasted just seven weeks.
A package of unfunded tax cuts that Truss unveiled last month spooked financial markets with the prospect of ballooning debt, drove the pound to record lows and forced the Bank of England to intervene, weakening Britain’s fragile economy and obliterating Truss’s authority within the Conservative Party.
Sunak is seen by Conservatives as a safe pair of hands who they hope can stabilise an economy sliding towards recession. They also hope he can stem the party’s plunging popularity.
Sunak brought in people from different wings of the Conservative Party for his cabinet. He removed about a dozen members of Truss’s government but kept several senior figures in place, including Foreign Secretary James Cleverly and Defence Secretary Ben Wallace.
He faced a backlash for reappointing Home Secretary Suella Braverman, who resigned last week after breaching ethics rules by sending a sensitive government email from a private account. She used her resignation letter to criticise Truss, hastening the then-prime minister’s departure.
Braverman is a leading light of the Conservatives’ right wing who infuriates liberals. She is tasked with fulfilling a controversial, stalled plan to send some asylum-seekers arriving in Britain to Rwanda.
Sunak denied an allegation by Labour leader Keir Starmer that he had made a “grubby deal” with Braverman in return for her support in the leadership contest.
Opponents expressed astonishment that Braverman could be back in her job less than a week after her resignation and before an investigation of her ethics breach.
“It has to be said also that Sunak for his first outing for a PMQs, he did lose out quite considerably, but then he did defend his home secretary, saying that she actually apologised and offered her resignation when she realised she had a mistake over that email,” he said.
“So the substantive issues haven’t really been fully addressed in this exchange,” he added. “It has been more of a fist fight on who can have the higher moral ground and indeed a higher political ground.”
Sunak also kept in place Treasury chief Jeremy Hunt, whom Truss appointed two weeks ago to steady the markets. His removal likely would have set off new tremors.
Hunt, who had planned to deliver a statement on October 31 about how the government will manage a budget shortfall, will now have a few more weeks to outline plans to fill the 40-billion-pound ($45.88bn) fiscal hole created by soaring inflation and a sluggish economy and exacerbated by Truss’s tax plans.
Following confirmation of the budget plan postponement, British government bonds continued to lose money. Long-dated gilt yields increased by 12 to 13 basis points on the day, setting new session highs. The news barely made a dent in sterling.
The delay will make it more difficult for the Bank of England to do its job the following week when it must publish economic predictions without having full knowledge of the government’s fiscal plans. Additionally, it will make the most recent monetary policy choice.
On November 3, the central bank is anticipated to once again increase its benchmark interest rate, most likely from 2.25 percent to 3 percent.
