Business Maverick: Sunak faces dose of reality as economic and political woes mount

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Rishi Sunak won an endorsement from financial markets in his first days as prime minister, and even some favourable polling numbers from the British public. His first full week in power may be more challenging.

The new premier’s economic policy is set to face scrutiny as the Bank of England delivers what could be its biggest interest-rate hike in more than 30 years, and the government looks to fill the multi-billion hole in the nation’s finances before a fiscal statement next month.

But those bounces risk fading once Sunak is confronted with the economic reality of soaring borrowing costs and the risk of a prolonged recession. Those dangers could be laid bare by the BOE on Thursday, when it presents economic forecasts along with its latest rate decision. The weekend newspapers gave a flavour of the choices Sunak and his Chancellor of the Exchequer Jeremy Hunt must make to find up to £50 billion of tax rises and spending cuts before 17 November’s Autumn Statement.

Cabinet minister Michael Gove defended her reappointment on Sunday, saying the public and the media shouldn’t rush to judgement. He said that making more details public could itself be a threat to national security, but that he was glad Sunak gave Braverman a second chance and that she was “absolutely” a politician of integrity.

 

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