Britain’s Prime Minister Liz Truss is fighting for her career.Credit:AP
MPs are demanding a change to the party’s constitution that would mean grassroots members would be out of the selection process for a new leader,in a bid to avoid another protracted contest.
Truss,who was appointed by the late Queen on September 6,will address the faction known as the “One Nation” group of centrist Conservatives,following a weekend in which three of her MPs called on her to quit and her new chancellor tore up the agenda on which she was elected by party members.
Downing Street was braced for further market turbulence on Monday,after Friday’s sell-off when investors warned that Truss’ attempt to reassure them by scrapping £18 billion ($32.5 billion) in corporate tax cuts was not enough.
Goldman Sachs cut its forecast for Britain’s economic growth and warned that it now expected a more significant recession following the U-turn on corporate tax,while Bank of England governor Andrew Bailey told an audience in Washington on Saturday (US time) that “inflationary pressures” meant a “stronger response” could be needed from the central bank than thought in August.
The next rate rise decision is on November 3,days after the strife-ridden Truss government is due to lay out its updated economic plans.
The bank launched a dramatic £65-billion emergency intervention into bond markets last month as it warned of “material risk” to Britain’s stability and pension markets amid the chaos that has sent government borrowing costs soaring and compounds sky-high inflation.
While Truss has an uphill battle to halt momentum swinging towards candidates such as her one-time leadership rivals Rishi Sunak and Penny Mordaunt,the mood in Westminster is likely to be shaped as much by the behaviour of the financial markets.