This crisis has definitely caused a shameful and embarrassing situation for the new government, which is just few weeks old, headed by Ms Liz Truss. She was elected as the new Prime Minister defeating a promising leader Mr Rishi Sunak.
There is a big question mark on whether Truss-led government is even serious about the financial well being of the country. Their announcements of policy reforms and income tax cuts show less credibility about their intention to revive the British economy. They are now considering benefit cuts for the citizens and cost cuts for various government departments.
The Bank of England intends to buy many long-term government bonds to counter recent financial slide. But on the other hand, it looks like the central bank will have no choice, but to raise the interest rates more aggressively. This could lead to higher cost of living, less demand for houses, leading a downward journey for the whole of economy. This could mean an inevitable recession, which could last little longer than expected.
Amidst the soaring burrowing costs, will the British government be able to restore its credibility and convince the world that things are under control back home?
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