Client Update - 21st October 2022

Five minutes after we sent last weeks email, Kwasi Kwarteng was gone as chancellor, to be replaced by Jeremy Hunt. Now as I write, within a week we will have our third Prime Minister in eight weeks. To have one new Prime Minister without a general election is not unusual, however, to have two is. The UK’s reputation for economic and political stability is in tatters. The recent International Monetary Fund (IMF) intervention underlines that the UK is no longer a great power on a global financial basis and the UK authorities have been reminded that their capacity to steer a lone path on economic matters is beyond them.

Liz Truss has taken her place in history, for the time being, as the shortest serving UK Prime Minister, and if the new person in charge chooses their own senior cabinet, Jeremy Hunt could be the shortest serving chancellor. This is, however, unlikely. It would seem to make sense to let Hunt deliver his fiscal plan on the 31st October along with the backing of his strategy from the Office of Budget Responsibility to soothe markets.

Who will be next? All of the expected names are in the hat, from Rishi Sunak, Penny Mordaunt, even stretching to “bring back Boris”. We await news on Monday as to who has attained the 100 nominations to go through to an online Conservative MP vote, the winner of which to be announced as the new leader next Friday.

UK markets have coped remarkably well with the last few days of political turmoil, undoubtedly waiting to see what happens next. This is exactly what we intend to do and I shall write next on the 31st October to give our view on the new Prime Minister and the chancellors fiscal statement. Until then, do look after yourselves.