The “hot potato” of the economy and three other challenges that Sunak must face

Inflation at record levels, strikes, a health system on the brink of collapse: o Britain’s new prime minister Rishi Sunak he will be faced with a mountain of challenges and an urgent mission to reunite the Conservative party.

Economic and social crisis

This is his absolute priority Rishi Sunak. Inflation exceeds 10%, i.e. it is the highest recorded among the G7 countries. Energy prices have skyrocketed, food is following suit. The risk of recession is pending. It will also need to reassure markets, which were shaken by the Liz Truss government’s budget announcements in September.

Rishi Sunak “should reassure people before winter arrives, about the fear of generalized poverty, economic uncertainty,” explained Anand Minon, a political scientist at King’s College London.

In his previous bid to become prime minister in the summer, Sunak insisted it was necessary to tackle inflation. “But he hasn’t specified how he plans to do that,” Catterall commented.

Danny Hewson, an analyst at AJ Bell, said however that Sunak “has the markets on his side” because they “hope he will stabilize the economy and the political situation”.

It is a fact that when Boris Johnson announced he was abandoning his bid to return to Downing Street, which meant that Sunak was now the absolute favourite, City breathed a sigh of relief. Yields on 30-year British bonds fell to 3.886% today, from 4.06% on Friday. However, they remain much higher than at the end of 2021, when they hovered around 1%.

Sterling was flat at $1.1301 around 4pm (GMT). In this area, Sunak’s job is already shaping up to be extremely difficult, said Susanna Streeter, an analyst at Hargreaves Lansdown.

With purchasing power in freefall, the strikes they succeed one another.

Soon, the nurses are going to decide what their next moves will be. The public health system is “on its knees,” said Pippa Catterall, a professor of political science at the University of Westminster, who fears hospitals will not be able to make it through the winter.

Reuniting the Conservatives

After 12 years in power, the Conservative party looks more divided than ever. Johnson fell in July after losing the confidence of 60 members of his government. Liz Truss only stayed in office for 44 days, never managing to convince her colleagues.

Since 2016 five prime ministers, all from the Conservative party, have succeeded each other.

Most MPs supported Sunak’s candidacy, which strengthens his position.

Read more: Who is the new Prime Minister of Britain?

“It only takes 40 MPs to lose a vote,” warned Anand Minon, however. “There is still the hard core of Johnson’s supporters” who have been at odds with Sunak for months, Pippa Catterall also commented.

We must “unite or die”, the party’s new leader warned today: Labor leads by a landslide in the polls, two years before the next election.

And besides, Rishi Sunak should hold out until then. Anand Minon believes it will but “there are no guarantees because the situation is extremely uncertain”.

Northern Ireland

Rishi Sunak, who was a supporter of Brexit, will also find in his basket the thorny problem of the protocol for Northern Ireland. London is proposing a bill unilaterally scrapping key parts of the deal with the European Union, and Brussels is threatening trade retaliation.

Sunak has already spoken out in favor of the bill.

But this is not enough for the Unionists of Northern Ireland who block the operation of the institutions of the province (government and local parliament). If no solution is found by Friday, snap elections will be called.

Immigration

After Brexit, British governments are promising in vain that they will drastically reduce the number of immigrants. This year, a record 37,570 people crossed the English Channel.

Sunak supported the government’s plan to send asylum seekers arriving irregularly to Rwanda. However, the implementation of this plan has been blocked for months due to legal appeals.

On the other hand, he has not made clear exactly what his intentions are with regard to work visas at a time when the UK is facing labor shortages.

Foreign Policy

Britain has pledged £2.3 billion in military aid to Ukraine – the most of any country other than the United States. “I think nothing will change in Ukrainian,” explained Anand Minon. “The two major political parties agree that it is necessary to maintain this policy in the face of Russian aggression,” he added.

As for China, Rishi Sunak has called it “the biggest threat to the security and prosperity of the UK and the world”.

RES-EMP

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