Liz Truss won’t have much time to get used to Downing Street. The new prime minister of the United Kingdom Liz Truss, who takes the place of Boris Johnson, will have in fact suffered many thorny issues to resolve. “The combination of economic recession, rising unemployment and lowering real wages does not bode well for the political survival of any government. In this regard, we believe that Liz Truss will not even enjoy the typical honeymoon period at the time of taking office, and Truss will likely end up with the shortest term of any other prime minister in the last half century, before the election. of 2024 lead to a change of government, ”argues Elliot Hentov, Head of Macro Policy Research, State Street Global Advisors.
The expert from State Street Global Advisors points out that the labor market is likely to weaken a lot over the next year, with a significant increase in unemployment. “The stagflationary recession of 2022-2023 – continues Elliot Hentov – will hit the finances of families hard: it is expected that at the end of 2023 the real purchasing power of families will be lower than that of 2007, before the financial crisis. It is not difficult to assess the damage that all this will do to the electorate. The Bank of England’s frantic response aimed at reducing high inflation will also result in lower growth, despite the fact that the various fiscal initiatives of the next prime minister may help to buffer the shock in energy prices ”.