March 31, 2023

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UK inflation hits 10% as Liz Truss faces Parliament

UK inflation hits 10% as Liz Truss faces Parliament


British Prime Minister Liz Truss lost her second key government official on Wednesday after Home Secretary Sola Braverman resigned.

On another day of political turmoil in Britain, Braverman left her position as Home Secretary – one of the “Four Great Offices of State”, or the highest positions in government, which also includes prime minister, chancellor and foreign minister. The terms of her resignation are still unclear.

Since Truss became prime minister in early September, two senior figures have left their posts. Its former advisor, Kwasi Kwarting, was fired last Friday.

Earlier in the day, Truss declared herself a “fighter, not a surrenderer” amid calls for her resignation in her first public questioning session since she fired her finance minister and saw her economic agenda smashed.

Truss has made an apology to Parliament – of sorts – for coming under fire for initially proposing deep tax cuts and then back after her policies sent financial markets reeling.

“I’ve been very clear that I’m sorry and I’ve made mistakes,” she told lawmakers in the House of Commons, where opposition members accused the new prime minister of ruling without a viable plan and without a mandate.

As Truss struggles, so does the British economy. A few hours before her appearance in Parliament, the government reported inflation It rose to 10.1 percent in September Compared to last year’s prices. The rising cost of food led to higher prices.

The economy was in trouble before Truss became a leader – though it could be said that she made things worse. Energy prices are on the rise, in part due to the Russian war in Ukraine; The British pound is being battered. The Bank of England has warned of the possibility of a recession before the end of the year.

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In her remarks, Truss blamed global winds for the problems — not her failed plan for economic growth, which envisioned tax cuts for the rich and corporations, driven by deep borrowing and more debt.

After Liz Truss’ agenda burns, Britons wonder if the Prime Minister is still in charge

Her appearance in the Prime Minister’s Questions, or PMQs – for only the third time since becoming leader of the country six weeks ago – has found Truss mostly on the defensive. Opposition parties attacked. But the opposition has not run Britain for 12 years. Her conservative party has.

Labor leader Keir Starmer asked Truss, “What is the point of a prime minister whose promises didn’t last even one week?”

Starmer said Truss’ now-defeated economic plan had led to a rise in adjustable mortgage rates for homeowners, and accused her of “ruining” the British economy.

“How can she be held accountable when she is not responsible?” Starmer wondered, noting how her new chief financial officer, Jeremy Hunt, introduced an entirely new government policy this week. Some British politicians and media have referred to Hunt as the “actual prime minister”.

Truss replied, “I acted in the national interest to make sure we had economic stability.”

Comments from the audience were brutal. One vote From YouGov found that only 10 percent of voters have a positive view of Truss, making her the most unpopular female prime minister the organization has ever tracked. else exploratory study She has found that most members of the Conservative Party – a small segment of the population who voted for her to take office – would now like to see her resign.

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If Truss stays in office, it may be less because she is a fighter and not because Tory MPs – who will have to press or vote on her – are divided over who might replace her.

Secretary of State James Cleverly was among those in the party who called for patience. Speaking to Sky News, he said that “going for another leadership campaign, firing another prime minister” would not “convince the British people that we are thinking of them rather than ourselves” or “convince the market to remain calm”.

“Being grumpy, I totally understand, but this is an emotional response, not a plan,” he added.

The latest double-digit inflation figure is a 40-year high and matches the figure in July after dropping slightly to 9.9% in August. The government’s target inflation rate is 2 percent.

Figures released by the Office for National Statistics on Wednesday showed that rising costs were mostly driven by food prices, which jumped 14.5 percent from the same month last year. This was the largest annual increase since 1980.

“After a slight dip in the past month, headline inflation is back to its highest levels seen earlier in the summer,” Darren Morgan, director of the Bureau of Economic Statistics, said in a statement. “The rise was driven by further increases in food items, which saw their biggest annual rise in more than 40 years, while hotel prices also rose after falling at this time last year.”

He added that the increases were tempered to some extent by the decrease in the prices of gasoline and airline tickets, and that the prices of used cars did not rise as much as last year.

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Hunt hit back at the numbers, saying he understands that people across the country are suffering from high bills.

“This government will prioritize helping the most vulnerable while providing broader economic stability and driving long-term growth that will help everyone,” he said.

On Monday, Hunt announced that Truss’ previous pledge to help Britons with their energy bills for the next two years was insignificant because it was so costly. Now, support will only be guaranteed until April 2023. More help will be “targeted” after that, Hunt said.

The government has so far refused to fund this subsidy with a windfall profit tax for oil and gas suppliers, as the opposition demands.

Experts have warned that due to rising global energy prices, bills could rise from an average of $2,800 a year to more than $4,500 next spring.

The pressure on household costs affects those on lower incomes more because they spend a greater proportion of their money on food, fuel and energy.