Unite...Or Die

These were the words from our newly generated PM to Tory MPs yesterday.

It could more appropriately have been, "or face extermination", as it's said, "life imitates art".

Current Doctor Who Jodie Whittaker's abrupt regeneration into previous incarnation David Tenant threw fans who were expecting newly announced Ncuti Gatwa instead.

Thankfully UK politics didn't get the script and missed Johnson 2.0 and went straight from Truss to Sunak.

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I’ve written enough about not being able to predict markets, let alone the soap opera that has played out these last few months.

So before putting pen to paper on a new article…for a new PM, I thought I would quickly scan through my previous musings to see how they read in retrospect.

July 22: From X To Z Email

Off to a flyer here from my email in July.

"The right choice should be Sunak; he understands the books must be balanced. Ultimately it will be Truss, brandishing Margaret Thatcher values of tax cuts, de-regulation and tough reform; exactly the messages the Tory faithful want to hear. Plus she’s probably easier for the puppet masters to control, and more likely to blow up, allowing the door to re-open. Boris Johnson’s parting words were “Hasta La Vista Baby”. Perhaps they should have been “I’ll Be Back”."

Thankfully the last lines didn’t come to fruition, however for a good 48 hours Saturday to Monday, it looked like they might have!

August 19: The Fight To Be PM

Ever so close to the mark here in my final paragraph of this post.

"What is evident is that neither UK nor US markets are particularly concerned who is elected, so long as they don’t bring extreme policy making and idiosyncrasies with them.

So the arrival of Truss or Sunak in Number 10 shouldn’t herald seismic shifts in economic policy, and therefore financial markets should continue to deliver investors positive returns over the longer-term, with the expected occasional bouts of volatility."

Cue the extreme policy making mini-Budget and markets delivered an immediate bout of extreme volatility.

At least the Tweet reference at the start of the article held true, she did indeed “hit the ground from day one.”

September 23: The Mini "trickle down" Budget

Back on track here, in the conclusion of this article.

“…this has the distinct feeling they have bet the house on the first spin and if it all goes wrong, we could very well see a Boom & Bust, without the Boom.”

Truss and Kwarteng did indeed bet everything they had on the mini-Budget. They both left Office convinced they did the right thing; it was just the wrong time. The fact they did it however, should have been no surprise. It was all laid out in their 2012 book, Britannia Unchained…available at all good booksellers, hopefully at significant discounts.

October 17: Major U-Turn for Mini-Budget

Finally, from this month.

There is however a question mark over whether the Truss Government can get all its measures through – never mind the bigger question which is when will the sword of Damocles eventually fall on Truss, because one thing is for certain, she will not be the PM that leads this Government into the next General Election.

Of course, as it turned out, she would not be leading them into the next week.

Now we turn to Rishi Sunak, our fifth PM in six years. Will he be the PM that leads the Conservative Party into the next General Election?

History does not suggest that many prime ministers appointed mid-term with their predecessor having failed turn out to be great. Sunak has two failed predecessors. That’s really not good.

Coupled with the fact he has a list of issues so long, Billy Joel could fit them into a 10 minute long of “We Didn’t Start The Fire”. (The irony of course, is that we did.)

These issues include:

• Brexit, which is clearly not working and may never work

• Division over Northern Ireland

• Scotland wishing to leave the Union

• No progress on climate change

• Inflation

• Rising interest rates

• Strikes

• A cost-of-living crisis

• Vast numbers of small businesses in deep trouble

• People who can’t pay their mortgages or rent (or if they can, have nothing left to spend on anything else)

• Unemployment likely to increase

Add to that further problems that will prevent him balancing the books:

• Record NHS waiting lists

• A failing court system

• Social care beyond breaking

• Education stretched to its limits

• Increased defence demand

• Falling tax revenues

On top of this he has to keep the markets happy and fill a ‘black hole’ in government finances without creating new money, which he did during the Covid era.

He can do all of these things. But he won't.

He will be prevented by crazy demands from across the Tory party.

He is completely correct in his statement. The Tory MPs must unite, or face being wiped out in two years, should they even manage to stave off the public calls for a General Election for that long.

In fact, while Labour is outwardly asking for the public to have their say, I suspect they will be happy to watch this unfold from the side-lines. The issues are not going away any time soon.

Sunak's one trump card is to tell The Bank of England to back off interest rates.

Further increases wont "fix inflation" and the goodwill he would receive from those staring down the barrel of crippling mortgage hikes could well see him through the two years. By then, inflation may well have come down on its own and that will be the good news story he takes to the public come voting time.

He won't though, he is a banker by profession and by heart. He believes in the markets. And it will be his downfall.

The Bank of England will continue to put up rates. And the public, who believe in the pound in their pocket, will seal his fate.