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It’s the first day on the job for the UK’s new prime minister, but we’ll be bold and assume there are no swag bag pick-ups or icebreaker activities on the docket this morning.
What happened: Liz Truss has formally taken over as the country’s leader after winning 57% of the vote for Conservative Party leadership, a job previously held by Boris Johnson.
- Johnson, who replaced Theresa May to lead the Conservative Party less than three years ago, has been forced to resign after a string of well-documented scandals.
Truss has inherited the country’s cost-of-living crisis, Brexit’s aftermath, a war in Europe, and waning support for her party, all of which she’s now tasked with turning around.
Her first order of business will be tackling an energy crisis sparked by Russia’s invasion of Ukraine and worsened by the Kremlin’s decision to halt Nord Stream 1 flows last week.
- By next month, average household energy bills in Britain will be three times more than a year ago (a popular morning show is even offering to pay energy bills as a prize).
Why it matters: A struggling major economy directly impacts global financial markets. The UK has the highest inflation rate among G7 economies, and its currency is losing value fast.
- The right solution is unclear. Truss is facing pressure to cuts taxes and offer cash support to households, but some experts say those measures could worsen inflation (and the incoming recession).
Zoom out: Energy-driven inflation is only one problem Truss now faces. Workers are demanding higher wages to keep up with high prices, and the medical system is at its breaking point. Talk about a tough first day on the job.