After the Truss-Kwarteng crash, a tentative welcome for Sunak

Let’s hope Tuesday’s partial eclipse of the sun was a good omen for the return of Rishi Sunak to Downing Street, this time as Prime Minister. Understandably, he looked more earnest than triumphant. Business leaders and financial markets gave him a positive welcome but – understandably also after months of turmoil, with huge challenges ahead – rather a tentative one. Ten-year gilt yields dropped from a panic-driven 4.5 per cent to a still worried 3.8 per cent, double their recent lows; the pound blipped up, then settled back to its recent benchmark of $1.13.

A ‘dullness dividend’ is what money men are hoping for, we’re told, after Johnson’s narcissistic inattention and the crackpot Truss-Kwarteng entr’acte. We know we’re heading for austerity and orthodoxy; we await the fiscal statement due on Halloween. Business, as I’ll elaborate in a moment, can cope with any shade of government so long as it’s clear in its direction and competent both in execution and in speaking the language markets understand. Sunak as chancellor scored high marks for competence; the financial community recognises him as one of their own. But the capriciousness of events, politics and global economic forces waits to knock him off course.

Feast of Fools

Another week of havoc before Sunak’s victory, another conference gig for me. As Westminster’s Feast of Fools was preparing to usher the Lord of Misrule back from his Caribbean idyll, I was at the Roundhouse offering an update on the political and business outlook to a gathering of hospitality chiefs. The rock-concert ambience was at odds with the palpable sense of apprehension among a crowd wondering what plague might hit them next as borrowing costs soared, consumers huddled, and energy bill relief fell into Chancellor Hunt’s bacon-slicer.