The Conservative party is heading into its annual conference amid the catastrophic fallout from Chancellor Kwasi Kwarteng’s mini-budget. The decision to cut tax without a plan to pay for it caused a sharp fall in the value of the pound on currency markets, which reached an all-time low against the dollar in Asian markets, and a rapid rise in costs of government borrowing. Both are indicators of the strongly negative reaction of financial markets to the mini-budget.
Party members, who were, after all, the ones who chose Truss as prime minister, will now be wondering whether their choice (and the abrupt change of direction in economic policy it enabled) will cost them the next election. And they are right to be worried.
According to the most recent YouGov survey Labour is a staggering 33% ahead of the Conservatives in voting intentions, gathering 54% of the vote in total. If sustained, that would give the party a majority in the House of Commons larger than Tony Blair’s victory in 1997.
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