London The next British Prime Minister will be either Rishi Sunak or Liz Truss. The two Conservative politicians won the final round of voting within the Conservative faction and are now entering the final vote.
By September 5, about 175,000 Conservative Party members must vote by mail to decide the new party leader, who will succeed resigning Boris Johnson as Prime Minister at 10 Downing Street after the parliamentary summer recess. Johnson appeared for the last time in the House of Commons on Wednesday.
Ex-Finance Minister Sunak received 137 votes, while British Foreign Secretary Truss received 113 of the 357 Conservative MPs. It just passed the remaining Penny Mordaunt, who got 105 votes and was second to Sunak for a long time.
The two finalists beat six contenders in five voting rounds. In an internal party election campaign, they will now try to win over as many old-fashioned, Eurosceptic party members as possible to their side.
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According to recent polls, Truss, who is backed by the party’s right wing, has a better chance at the base than Sunak, who appears technocratic and is often criticized by his Conservative friends over his tax increases.
However, the former Chancellor of the Exchequer is valued for his expertise in economic policy and is seen by the Conservative faction as the person most likely to lead Great Britain out of the worst economic crisis in 50 years.
In June, consumer prices rose 9.4 percent. “We expect another increase to 11 percent by October,” said James Smith, an economist at Dutch bank ING. British trade unions are attempting several strikes to prevent their members from suffering further real losses in wages.
The Bank of England is considering raising interest rates by half a percentage point to 1.75% at its next meeting in early August in order to control inflation. According to the forecasts of the Organization for Economic Development and Cooperation (OECD), economic growth is expected to stop next year.
Thus, the struggle against the economic crisis and the sharp rise in the cost of living must also mark the end of the struggle for Downing Street. The central question is whether tax cuts for consumers and businesses can slow down an economic downturn without increasing inflation. While Sunak is defending the tax increases he initiated in light of the strained state of public finances, Truss has promised the Conservative party’s base of tax cuts.
The foreign secretary, who does not always seem to be fully prepared during televised debates on economic issues, has announced tax breaks of more than £30 billion a year. Among other things, it wants to reverse the increase in Social Security contributions paid by Sunak and cancel the 19 to 25 percent corporate tax increase planned by its rival.
The controversy over tax cuts
The tax cuts must fund themselves largely through higher growth. In addition, Truss apparently wants to extend the repayment of the national debt and help determine the course of monetary policy for the Bank of England. The secretary of state received support for her proposals from outgoing Prime Minister Johnson, who also called for tax breaks when he left.
On the other hand, Truss’ economic policy proposals were not only heavily criticized by rival Sunak. The former finance minister described plans to fund the tax increases as “fairy economics” and promised to focus on fighting inflation.
Michael Saunders, a member of the Bank of England’s Monetary Policy Council, has warned against questioning the independence of the central bank. Citibank’s chief economist, Benjamin Nabarro, described the Truss policy platform as the “biggest risk” to the UK economy.
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