(Photo Courtesy: Guy Bell, Alamy Stock Photo)
Economic challenges face the young and new PM
BBC News, London, October 25, 2022
Rishi Sunak will be the UK’s next Prime Minister after winning the Conservative Party leadership contest, according to an announcement from Number 10 Downing Street.
Sunak will formally take over as the Prime Minister on Tuesday Morning (GMT) after meeting King Charles and will give a statement at around 11. 35 am (GMT).
That will follow a final cabinet meeting chaired by outgoing Prime Minister Liz Truss at 9 am (GMT) and a statement from her at around 10.15 am (GMT).
In a brief address earlier, Sunak warned that country faced “profound economic challenges.”
He will become the UK’s first British Asian PM and at 42, the youngest leader in more than two centuries.
The sole contender
Labour has repeated calls for a general election, echoed by the Scottish National Party, the Liberal Democrats, and the Green Party. But, immediately after being selected by Tory MPs, Sunak ruled out an early election and warned the Party that they had to “unite or die.”
The ex-chancellor, who oversaw the nation’s finances during the Covid pandemic, was the only contender to gain enough support from MPs to stand for the job.
Cost-of-living crunch
It was announced last week that inflation in the UK – the rate at which prices are increasing – had surged to 10.1%, a 40-year high.
The rising cost of basic household goods like fish, fruit and rice leaves many Britons understandably concerned, going into winter already fraught with anxiety over increasing energy bills. Adding to these pressures is the government’s decision to end help with energy bills – which limits the average household energy bill to £2,500 a year – in April 2023, not in two years.
Interest Rates
The Bank of England has put up interest rates in an attempt to bring down people’s spending – but that means (a) Mortgage repayments have increased for people not on fixed rates (b) Lenders might choose to increase fees charged on credit cards, bank loans or car loans (c) Meanwhile, savers are not seeing interest rates on their accounts rise in line with the Bank of England figures, meaning they are not keeping up with the cost of living.
Mini-budget aftermath
The beginning of the end for Truss was the announcement of her mini-budget, alongside then-Chancellor Kwasi Kwarteng. Its raft of unfunded tax cuts rattled markets, plunging the pound to a record low against the dollar and causing the cost of government borrowing to rise sharply.
New Chancellor Jeremy Hunt, whom many expect to remain in his job, has since scrapped almost all the policies in that mini-budget.
His much-anticipated fiscal plan is due on 31 October, and the new Prime Minister is expected to drive through new public spending cuts to try to restore financial stability.
But can Sunak do what Truss couldn’t – and placate not just the Conservative Party, but also the world’s financial markets, with a workable economic plan? We’ll have to wait and see.
India’s great pride
Rajini Vaidyanathan
BBC South Asia Correspondent (Delhi)
Rishi Sunak will become the UK’s first British Asian Prime Minister, and the first Hindu to hold the office. His confirmation to the top job came on the evening of one of the most important days in the Hindu calendar, the festival of Diwali – a national holiday in India.
The timing was not lost on some of the news channels which had broken into rolling coverage.
“This comes auspiciously on Diwali,” a news anchor said.
“Rishi Sunak has given the entire nation a Diwali gift,” proclaimed another.
Sunak’s parents came to the UK from East Africa; his grandparents were from Punjab. His father-in-law Narayana Murthy is the founder of Infosys and is one of India’s best-known businessmen.
As speculation mounted over his likely victory in the Conservative leadership race, he shared the front page of one newspaper with Indian Prime Minister Narendra Modi, and Cricket Superstar Virat Kohli, two of the biggest names in this country.
Now, expect India’s fascination with Sunak to grow.
“This is a matter of great pride,” was how one journalist described events.
75 years since India gained independence from British rule, Rishi Sunak’s rise to the top is being seen as a landmark moment for this nation.
Indian Prime Minister Narendra Modi has sent his “warmest congratulations” to Rishi Sunak following the news of his victory in the Tory leadership contest.
Mr Modi said that he looks forward to working closely with the new Prime Minister to tackle global issues and implementing what he calls “Roadmap 2030” – an agreement struck last year between the UK and India to increase trade and ease migration of young adults between the two countries.
“Special Diwali wishes to the ‘living bridge’ of UK Indians, as we transform our historic ties into a modern partnership,” Mr Modi said.
Source: BBC News, London.
