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Wednesday, February 28, 2024

Walking down the gauntlet: Difficult task ahead for Rishi Sunak

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This news has been flashing across the world as a big breakthrough in ending the white suprematist culture. In a way it is true as well. Britain, which has so far, ruled the world with its selective and biased judgment is suddenly  going ballistic about a brown PM. The feelings of the Britons have come ashore with their deeply rooted racism and superlative bias.

We Indians, who need a reason to celebrate the rise of our kind at the global arena, let alone the head of government of a colonial power, are a happy lot. First the nail biting victory against Pakistan and then the news of Rishi as UK’s new PM, we are in a festive mood. But behind all these hullabaloo, Mr Sunak faces one of the toughest challenges in British History.

Liz Truss, the previous Prime Minister of the UK, had to resign unexpectedly within a span of 44 days for the mere fact that she couldn’t provide a solution to Britain’s existing problems. UK is battling with a high inflation of ~ 10%, negligible growth (as per the IMF forecasts, the country is expected to grow by 0.3% in 2023), rising energy bills owing to the ongoing conflict between Russia and Ukraine, providing global leadership in a fractured and polarized world notwithstanding the fissures appearing in the Euro Block and providing a successful conclusion to the Brexit referendum.

Rishi, the no-nonsense, Stanford educated, erstwhile investment banker and the ‘chance’ Prime Minister not only has to steer ‘His Majesty Ship’ in the right direction but also has to prove that he is Indian only in race but English in intellect, thought, lifestyle and ambition. It is all the more important because he was never the PM face for Conservative Party during the hustings. And many Conservativies firmly believe this selection as imposition rather than selection of choice. These beliefs shall be firmly tested in the 2024 elections which are not far away.

As per an analysis done by Institute of Fiscal Studies (UK), Trade Shock i.e an increase in the prices of imports relative to exports shall have a major impact on the country’s borrowing plan to tame inflation. For households, the looming cost shock will hit those least able to bear it. Rising mortgage rates may push the consumer recovery only in the later part of 2024 as people might have to postpone any discretionary spending tll the situation improves. Since the output is still 2.6% short of its pre-covid level and the current excess demand is in the order of 1.4% of GDP, Inflation is likely to remain in the elevated zone throughout 2023.

As Carl Emmerson, the deputy director of IFS rightly said, ‘the degree of economic uncertainty, and the importance of getting this right, there is a strong case for taking a bit longer to make good decisions which have more chance of standing the test of time’.

And while the task is difficult and time limited, it is also a great opportunity for Rishi Sunak to prove his mettle. There are hardly a few PMs in the world today who are as qualified and talented as Rishi. And he joins office at a time when the entire world is looking for a global leadership to thwart the challenges of the post covid world order.

(Views expressed are personal)

#Britain, #RishiSunak, #UK

Satya Prakash
Satya Prakash
Satya, is an IIT/IIM graduate who currently works with a major bank in the country. He is a voracious reader with interest in finance, technology and history. When not working, he likes to travel and see new places

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