Liz Truss becomes new UK prime minister. What are the challenges in store for her?


Last Updated on 20 hours by Mukesh

The United Kingdom Foreign Secretary Liz Truss on Monday (September 5) became the new British prime minister, succeeding the ousted Boris Johnson. She has defeated rival Rishi Sunak. 

After the result was announced, Truss said, “We need to show that we will deliver over the next two years. I will deliver a bold plan to cut taxes and grow our economy.” 

“I will deliver on the energy crisis, dealing with people’s energy bills, but also dealing with the long-term issues we have on energy supply,” she added. 

Truss became Britain’s third female prime minister. But the road ahead is not going to be easy as she will have a mammoth task to address multiple crises that the nation is facing from different fronts. 

Surging energy prices

At the moment, the UK is facing multiple crises. The economy is forecast to go into a long recession later this year with inflation at a 40-year high. 

The new PM will have to tackle the energy crisis and a productivity crisis as both have affected people’s living standards. 

Britain’s energy regulator announced that the power bills will jump 80 per cent to an average of 3,549 pounds ($4,188) a year from October. This will send millions of households into fuel poverty. Businesses are also at risk unless the government intervene and comes up with a solution. 

ALSO READ | Liz Truss elected new UK Prime Minister, beats Rishi Sunak in leadership race 

Amid the Russia-Ukraine war, supplies are down nearly 50% this year there are chances that Moscow will cut off all gas supplies this winter. Just like Germany, France and Spain, the UK also needs an urgent crisis plan. 

In a research note, Goldman economists said, “In a scenario where gas prices remain elevated at current levels, we would expect the price cap to increase by over 80 percent in January (vs 19 percent assumed in our baseline). (This) would imply headline inflation peaking at 22.4 percent, well above our baseline forecast of 14.8 percent.” 


The Bank of England has anticipated that as the energy crisis intensifies, inflation will jump to 13%. As per Citigroup, the nation could peak at 18% in early 2023. meanwhile, Goldman Sachs warned that it could reach 22% if the natural gas prices “remain elevated at current levels.” 

At 10.1% in July, Britain had the highest rate of annual inflation among Group of Seven advanced economies. elevated dependency on imported gas and a fast-weakening currency are some of the reasons for British inflation. 

In the last three months alone, the pound fell to almost 8% against the dollar. This performance is worse than the euro or even the Japanese yen. If this scenario continues to worsen, it will make the imports of energy priced in dollars even more expensive. 

ALSO READ | What does Liz Truss’s victory mean for UK-India ties? 


The new UK PM backed remaining in the European Union before the 2016 referendum on membership of the bloc, but she had switched sides after the public voted to leave. 

Now, she has spearheaded proposed legislation to override parts of the Northern Ireland Protocol the UK signed with the EU governing current trade in the province. 

She has promised to take all EU laws off the UK statute book to help “turbocharge” growth. Truss has made no proposals to address chronic post-Brexit labour shortages in the UK, particularly of seasonal workers. 


Truss said that designate China as a threat to national security, but looking at other issues, this shouldn’t be the priority for the UK right now. 

While campaigning, she had said that as PM, she would increase defence spending to 3% of GDP by 2030 from 2.3% of GDP projected this year. 


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