Readers will know that I backed Liz Truss to become our Prime Minister to follow Boris Johnson. In the last two weeks we have seen that the markets judged the financial measures announced by the Chancellors as being too much too fast.
I remain proud that Liz acted quickly and decisively to put that right. She replaced her Chancellor with Jeremy Hunt who promptly settled the markets. And when it became clear that she could not deliver what she was elected to she resigned. It takes as much courage and leadership to know when to leave as it does to take it on. I am very proud of the dignity she has shown in the face of such adversity.
So now we have Rishi Sunak. I am very proud that it is the Conservative Party that has brought Britain its first non-white Prime Minister. Rishi won great admiration as Chancellor during the pandemic and he is well up to the task of facing the global economic challenges that face us. It will not be easy. The war in Ukraine is generating global inflationary pressure. We have enjoyed artificially low interest rates for a prolonged period and they will rise.
However confidence is by far the biggest determinant on how the markets judge a nation’s economy.
With Rishi’s reputation for sound economic judgment and with the prospect of a General election receding we can expect the markets to settle and any consequent rise in interest rates be minimised.
I wish Rishi all the best of luck. It is in the interest of everyone that he succeeds in brining stability at such turbulent times.