Liz Truss Ousted

UK Prime Minister Liz Truss resigned on Thursday making her the shortest-serving Prime Minister in UK history after a tumultuous six weeks. Her political leadership led to internal mistrust in the Tory party and to the public more broadly.


Source: Reuters/Henry Nicholls

Ms. Truss's tenure was rendered by a surreal series of events. She had to content with the national death of Britain's longest-serving Monarch, Queen Elizabeth II. Accordingly, 10 days were designated solely to mourning, leaving her unable to announce any government policy. Subsequently, she was faced with a plummeting pound which required significant government intervention within the bond market.


It was around a week ago that the chancellor of the exchequer, Kwasi Kawrteng, was fired for his poor economic management. In the background, Truss had been pushing for a risky-tax cut plan. During the campaign, Mr. Sunak - her Tory opposition for Prime Minister - warned that said tax plan would cause economic chaos. Yes, the party's 160,000 members placed faith in Truss who modelled herself as a modern-day Margaret Thatcher. However, Tory members are left scratching their heads and reflecting upon their decisions as Truss had failed to meet the bare-minimum Tory standard. While markets have somewhat stabilised, the political chaos in the UK has intensified.


Her leadership stands as an important lesson for global leaders; trying to boost the economy with stimulus packages during a period of high inflation and interest rates is risky.

There are now questions surrounding who will replace Truss. As is stands, lawmakers have tipped Mr. Sunak to take over Ms. Truss. Importantly, all that is required until the next election is stability. For the takeover of Truss there is a quickened process in place with candidates only needing to be the first to gain approval from over 100 lawmakers to be the new Prime Minister. Even if a sense of stability can be created by the new Prime Minister, the Labour Party leads the polls by 36%, according to Redfield and Wilton.


The Torys are riddled with trouble and trust issues within the party:

"This whole affair is inexcusable. It is a pitiful reflection on the Conservative parliamentary party at every level, and it reflects very badly on the government of the day", said Charles Walker, a Tory lawmaker for 17 years. "I hope all those people who put Liz Truss in No. 10 [Downing Street], I hope it was worth it...Because the damage they have done to our party is extraordinary".


Not only will the next Tory Prime Minister have to bolster support from the nation but must rally the Tory party together under a shared goal. Most likely, this goal will be the actualisation of sound policy and stability to ensure the Tory party win the next election.


There exists a range of possible leaders to take Truss' place. Besides the aforesaid Mr. Sunak, Penny Mordaunt has arisen as a strong contender for the job. However, what is working against her is her lack of senior ministerial experience and the fact she is largely untested which runs a large risk in the current climate.


Surprisingly, Boris Johnson stands a chance to be leader once again. While he was forced out of office concerning "partygate", there are talks that Mr. Johnson could return. It is a face he would understand what exactly needs to be done, yet he is also seen as a toxic liability, which means he could struggle to bring the party back together. Moreover, whether the public would be willing to forgive him is another question entirely.


Suella Braverman is also a potential candidate. However, her tougher stance on immigration and the culture war, while appealing to many Tory MPs, is less appealing to the public which is not useful in trying to bridge the gap with Labour in terms of votes.


Who rises to the top job will be revealed today.


 

To keep up with the latest finance, tech, crypto and geopolitical news, subscribe to our mailing list.

[Disclaimer: The material across our site is provided for informative purposes only and does not contain investment advice.]