In his first official speech on Tuesday, the government’s heading made the economy, the energy crisis and the health system “its first three priorities”.
Le Monde
two -digit inflation, threatens to recession and fear of a debt slippage with the surge in interest rates: the signals of the British economy are red while Liz Truss enters 10 Downing Downing Street. During his first speech since his official office taking on Tuesday, September 6, and in a country faced with a major crisis in the cost of living, Liz Truss promised to get the United Kingdom out of the “storm”.
His “first three priorities” will be the economy, the energy crisis and the improvement of the national public health system, said the successor of Boris Johnson, who has officially become Prime Minister on Tuesday.
“We are now confronted with serious worldwide winds caused by the dreadful war of Russia in Ukraine and the consequences of the covid,” said Liz Truss on Tuesday. “We must not be intimidated by the challenges we face,” she said in front of dozens of deputies, who had to shelter a pouring rain a few minutes before his arrival.
“As strong as the storm is, I know that the British people are stronger. (…) I am convinced that together, we can overcome the storm and rebuild our economy.”
Very liberal, the new Prime Minister, 47, has given priority to tax cuts to “reward those who work hard” and relaunch a economy promised to recession by the end of the year. But faced with price increases of 10.1 %, at the highest in forty years, which should reach new summits in the coming months, drawn by energy prices, M me Truss is also preparing to align billions of actions for British households.
“I’m going to tackle the energy crisis. I will take measures this week to deal with energy bills”, which must increase by 80 % to the 1 er October For an average home, she promised on Tuesday. According to British media, it is to announce a plan of several tens of billions of pounds on Thursday to freeze the prices of electricity and gas.
The United Kingdom could see the cost of its debt S ‘ Flying
The planned cocktail of tax cuts and increase in expenses “seriously challenges the budgetary credibility of the United Kingdom”, comments Geoffrey Yu, analyst at Iflow. An increased risk perception on British debt that increases remuneration and therefore interest rates matching this debt. The ten-year borrowing rate of the United Kingdom has passed on Tuesday above 3 % and has been playing at the highest since July 2011. The 3 % mark had not been crossed since 2014.
If market confidence continues to erode, “it could turn into a balance of payments in the event that [investors] foreign refuses to finance” British debt, warns Shreyas Gopal, analyst The Deutsche Bank. The economist points to the risk of a debt crisis similar to that of the 1970s, when the United Kingdom had to call on the International Monetary Fund (IMF) to bail out its boxes.
Geoffrey Yu judges, however, that the fears of a “budget collapse are not justified”, even if in the short term, the United Kingdom could see the cost of its debt fly away, also pulled by inflation, on which the interests of certain vouchers are indexed.