The two candidates jostling to become the next prime minister of the United Kingdom are making big promises about rescuing the country’s economy. It won’t be an easy task.
Rishi Sunak and Liz Truss, two politicians for the country’s Conservative Party, are in the final running to replace Boris Johnson after his resignation earlier this month — and face an uphill struggle to revive an economy battling record inflation, anemic growth and labor shortages.
Starting last year, soaring energy prices and supply chain snarls have fueled global inflation as the world’s economies emerged from their pandemic lockdowns. Russia’s invasion of Ukraine in late February exacerbated the situation.
The country’s economic woes, though, run much deeper than the crises of the past two years. The UK economy is expected to stagnate next year, with zero growth in 2023 — the worst-expected performance in the G7, according to the Organisation for Economic Co-operation and Development.
Truss and Sunak have promised to tackle inflation to help households burdened by the worst cost-of-living crisis in decades. They both have said they will cut taxes — though on very different timescales — and reevaluate the UK’s relationship with its biggest trading partner, the European Union.
But Ethan Ilzetzki, associate professor of economics at the London School of Economics, thinks the leadership debate remains “disconnected” from the nature and scale of the economic challenges: A decade-long stagnation in productivity levels won’t be easily solved.
“None of them have a true plan except for cutting taxes,” he told CNN Business.
“It is all about the level of taxes, the size of government. These are important questions… [but] there is no easy fix in terms of slashing taxes to the deep problems we have here,” he said.
While some of the difficulties ailing the world’s fifth largest economy will largely be beyond either Sunak or Truss’ control, they have made bold promises to Britons. Can they deliver on them?
Source: cnn.com
