(Finance) – New Tory leader appointed today, incoming British Prime Minister Liz Truss it faces unusually difficult economic conditions. This is what he underlines Scope Ratings commenting in a report on the legacy left by Boris Johnson to the new premier and the challenges that await her starting tomorrow.
The first problem related toinflation, specific to the United Kingdom, – notes the rating agency – is linked to” high percentage of inflation-linked public debt which in the country represents about 25% of the residual debt. A higher percentage than the other major European economies such as Germany (4%) and France (11%).
There credibility of Truss – highlights Scope Ratings – is immediately brought into play because of its political proposals. Truss promises a broad spectrum of changes including major spending commitments, tax reform, and a review of the country’s fiscal and legislative landscape.
The tax cut andincreased spending to compensate for the energy crisis – according to the rating agency – they could weaken public finances, creating risks to the UK economy that suggest growth will be slow. Furthermore, the reform proposals of the financial regulators and the Bank of England raise doubts as to whether their independence can be safeguarded.