As the nation recovers from 10 days of official mourning following the death of Queen Elizabeth II, you wonder if some people might wish it would continue a while longer.
Royal fans, and there are plenty of those, haven’t been able to get enough of the pageantry and spectacle. Others, however, could have a more pragmatic reason for wanting the pause to be prolonged. I refer to Liz Truss, the new prime minister and Kwasi Kwarteng, her chancellor.
No sooner has the funereal black been put away, than the Government is required to get down to urgent business. This week will see a flurry of announcements, on proposals to tackle the growing crisis in the NHS, meet rising energy costs, slash red tape and make tax cuts.
In a matter of days, we will have a good idea as to the direction of the Truss administration. Judging by the leaks, we’ve got one already. Having told the Conservative Party members who elected her that Ms Truss was going to reduce taxes, that is what she is going to do.
Her boast created clear blue water between Ms Truss and Rishi Sunak, her challenger, and conscious of sticking to a promise and the need to stamp her identity early on, especially with a party conference looming, we’re told that Friday will see Mr Kwarteng hold the much trailed “fiscal event”.
In what is effectively a mini-Budget, Mr Kwarteng will scrap the rise in National Insurance brought in by his predecessor, Mr Sunak, under the previous prime minister, Boris Johnson. Out too, will go green levies on energy bills, another staple of the eco-friendly Johnson. Corporation tax is set to be frozen. In all, Mr Kwarteng will announce a £30bn package of tax reductions.
Much will be made among their supporters in the media and politically of what he and his boss, Ms Truss, are aiming to achieve, which is to alleviate the pressure on consumers and drive growth. They will accompany these measures with another, controversially included in Mr Kwarteng's deregulation bundle, of removing the cap on bankers’ bonuses. It’s all part of what we will be told by their promoters is an attempt to “turbocharge” and “boost” the economy.
Queen Elizabeth's funeral - in pictures
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King Charles III in Westminster Abbey for the state funeral of his mother, Queen Elizabeth II. PA -
The coffin of Queen Elizabeth is carried into St George's Chapel in Windsor Castle for the committal service. PA -
The hearse arrives at Windsor Castle for the committal service. Getty Images -
Flowers are seen on the hearse as it arrives at Windsor Castle. AP -
King Charles and Prince William join the procession in the Quadrangle inside Windsor Castle. AFP -
The procession, led by the dismounted detachment of the Household Cavalry, followed by massed Pipes and Drums of Scottish and Irish regiments, the Brigade of Gurkhas, the Royal Air Force and the Band of the Grenadier Guards, arrives at Windsor Castle. Getty Images -
The hearse travels along the Long Walk as it makes its way to Windsor Castle. Reuters -
The ceremonial procession travels down the Long Walk in Windsor. PA -
The hearse travels to Windsor. Reuters -
The royal corgis await the cortege at Windsor Castle. Reuters -
A member of the Coldstream Guards walks past flowers at St George's Chapel in Windsor Castle. AP -
A mourner throws a flower towards Queen Elizabeth's hearse as it is driven to Windsor from London. Reuters -
Members of the royal family pay their respects as the hearse carries the coffin of Queen Elizabeth in London. Reuters -
The state gun carriage carrying the coffin of Queen Elizabeth arrives at Wellington Arch during the ceremonial procession following her state funeral. PA -
The funeral procession marches down The Mall following the service at Westminster Abbey. AP -
The coffin of Queen Elizabeth is carried from her state funeral at Westminster Abbey. PA -
King Charles walks with Princess Anne, Prince Harry and Prince Andrew behind the coffin of Queen Elizabeth as it is pulled on a gun carriage through the streets of London following her funeral service. AP -
Meghan, Duchess of Sussex, Queen Consort Camilla, Prince George, Catherine, Princess of Wales, Princess Charlotte and Sophie, Countess of Wessex, stand outside Westminster Abbey after the funeral. PA -
Buckingham Palace household staff pay their respects. AFP -
Mourners pause for two minutes' silence during the funeral service in London. Reuters -
The coffin of Queen Elizabeth, draped in a Royal Standard and adorned with the Imperial State Crown and the sovereign's orb and sceptre, arrives in Westminster Abbey. AP -
Prince William, his wife Catherine, the Princess of Wales, and their children Prince George and Princess Charlotte arrive at Westminster Abbey. AP -
Members of the public watch the funeral from Horse Guards Road in London. PA -
Archbishop of Canterbury Justin Welby speaking during the funeral. PA -
The coffin of Queen Elizabeth is carried into Westminster Abbey, followed by King Charles and Queen Consort Camilla for the state funeral in London. PA -
The coffin of Queen Elizabeth is carried by the Bearer Party into Westminster Abbey. Getty -
King Charles, Princess Anne, Prince Andrew and Prince Edward arrive at Westminster Abbey. AFP -
Prince William and Prince Harry make their way to Westminster Abbey. PA -
The State Gun Carriage carries the coffin of Queen Elizabeth through central London. PA -
Members of the public on the Mall become emotional during the funeral. PA -
The coffin of Queen Elizabeth II is placed on a gun carriage for her state funeral service in central London. AP -
The coffin of Queen Elizabeth leaves Westminster Hall. AP -
The Yeoman of the Guard arrive in Westminster Abbey. AP -
Guests take their seats inside Westminster Abbey in London for the state funeral of Queen Elizabeth. AFP -
The Royal Marines band marches to Westminster Abbey. Getty Images -
US President Joe Biden arrives for the funeral. PA -
French President Emanuel Macron and wife Brigitte walk into Westminster Abbey. PA -
Metropolitan Police Officers walk in formation down The Mall in preparation for the state funeral Of Queen Elizabeth II. Getty -
A Pearly king and queen, who raise money for charity, on the procession route in London. AFP -
People line the funeral procession route. Getty -
Mourners take a moment to rest on The Mall in London. Reuters -
At 6.28am on the day of her funeral, the final members of the public pay their respects at the coffin of Queen Elizabeth at the Palace of Westminster, London. PA -
London's Westminster Abbey on the day of the state funeral and burial of Britain's Queen Elizabeth II. Reuters -
Black Rod, the House of Lords' senior figure, walks through Westminster Hall at 6.30am after paying her respects on the final day of the lying in state at the coffin of Queen Elizabeth II in London. PA -
Police on patrol in Whitehall before Queen Elizabeth II's funeral at Westminster Abbey in London. EPA -
People in London camp during the night before the funeral of Queen Elizabeth II. Reuters -
Vehicles in the motorcade of US President Joe Biden and first lady Jill Biden arrive to pay their respects to Queen Elizabeth II in London. Getty Images -
US President Joe Biden accompanied by the First Lady Jill Biden signs a book of condolence at Lancaster House in London. PA -
Brazilian President Jair Bolsonaro signs a book of condolence at Lancaster House in London, after the death of Queen Elizabeth II. Reuters -
The first lady of Ukraine, Olena Zelenska (R) views the coffin of Queen Elizabeth II, lying in state on the catafalque in Westminster Hall in London. Getty Images -
Oman's Sultan Haitham arrives for a reception hosted by Britain's King Charles III for heads of state and official overseas guests, at Buckingham Palace in London, the night before the funeral of Queen Elizabeth II. AP -
Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, arrives for a reception hosted by Britain's King Charles III for heads of state and official overseas guests, at Buckingham Palace in London, before the funeral of Queen Elizabeth II. AP -
Lebanon's Prime Minister-designate Najib Mikati and his wife May sign a book of condolence at Lancaster House in London, after the death of Queen Elizabeth II. PA
That would be fine if they were funded, if Mr Kwarteng can say how they’re going to be paid for. But he can’t. This is the direct opposite of the caution espoused by Mr Sunak. This is a colossal gamble.
It comes on the back of freezing household and small business energy bills, a state intervention that is reckoned will cost £150bn, the biggest since the Second World War and dwarfing Mr Sunak’s initiatives to combat Covid. This, as well, the day after the Bank of England’s Monetary Policy Committee is due to hold its meeting postponed by the queen’s passing, when it is expected to again raise interest rates in an effort to curb inflation, currently 9.9 per cent and expected to go higher. Britain has not yet matched the formal criteria for being in recession, although many economists believe it is there and if it is not, it is only a question of when, not if.
No wonder the markets are jittery. The pound is at a 37-year low against the dollar and 17-month low to the euro.
Stand by for a jittery period for sterling and for Britain’s global financial standing. Ms Truss has admitted as much, saying she is prepared to “ride out the storm”.
Investors may not be impressed by what she terms her “bold plan” for the economy. The problem is that there is a fine line between “bold” and “reckless”. When she was on the hustings, making her sweeping statements, Ms Truss was aided by the finding from the Office for Budget Responsibility of £30bn of “headroom”, enabling her to make cuts and stay within the fiscal rule that says government debt must fall as a proportion of national income in 2024-25, the final year of this current Parliament.
It's likely that the energy crisis and a slowdown in the economy have eroded that vital leeway, meaning that by not diverting from their path, Ms Truss and Mr Kwarteng are in danger of breaching the fiscal rules, designed to ensure a government balances the books.
Confirmation the rules have been broken will not come until the full Budget in November. But Mr Kwarteng may seek to extend the deadline until into the next Parliament. Any suggestion they’re being brushed aside could cause the pound to go into a tailspin. That won’t happen if the markets are persuaded by what is probably going to be Mr Kwarteng’s reasoning, that conditions are so unprecedented as to justify the red line being crossed and that long term, he is fully committed to bringing down debt.
Cutting taxes while the economy is slowing, however, does not look like a sensible ploy. Ms Truss and Mr Kwarteng are going to have to do a lot of convincing. The tax cuts must be funded and that may come from increased borrowing, rather than from higher revenue due to the growth that they are seeking.
Much depends on how the backdrop for Britain is viewed. Ukraine’s fightback has sparked hopes that fuel prices will fall and that the conflict is nearer resolution. Despite the likelihood the UK is in recession, employment is holding up well. Unemployment is the lowest it has been since 1974.
Capping energy bills, while expensive, may prove to be a smart ploy, preventing consumer spending from dropping and causing a flatter, shorter recession. If investors can see the logic in the strategy the response may not be so negative. If, on the other hand, they see only madness and weakness, then a torrid time awaits.
Certainly, the 10-day breather and any generosity of international spirit towards Britain afforded by the monarch’s dying is well and truly over.
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King Charles III follows behind the coffin of Queen Elizabeth II, draped in the Royal Standard with the Imperial State Crown and the Sovereign's orb and sceptre on top, as it is carried out of Westminster Abbey after her state funeral. Reuters -
The ceremonial procession of the coffin of Queen Elizabeth travels down the Long Walk as it arrives at Windsor Castle for the Committal Service at St George's Chapel. AP -
Pall bearers carry the coffin into St. George's Chapel, in Windsor. AP -
A Royal Guard stands by floral tributes at Windsor Castle. AFP -
The coffin of Queen Elizabeth is pulled on a gun carriage by Royal Navy sailors to Westminster Abbey. Getty Images -
Prince William and Prince Harry follow the coffin of the queen after her state funeral in Westminster Abbey. AP -
Emma, the monarch's fell pony, stands as Queen Elizabeth's coffin passes at Windsor Castle. PA -
Members of the royal household stand with Queen Elizabeth's Corgis, Muick and Sandy, as they await the funeral cortege at St. George's Chapel, Windsor. AP -
Catherine, Princess of Wales, attends the state funeral service in London. AFP -
The coffin of Queen Elizabeth is pulled along The Mall following her funeral service in Westminster Abbey. AP -
Flowers thrown by the public lie on the hearse carrying the coffin as it arrives at Windsor Castle. AP -
King Charles at the state funeral in London. Reuters -
People sleep before the funeral service at Westminster Abbey. AFP -
A giant screen honouring the late queen at Piccadilly Circus in London. EPA -
King Charles looks towards the coffin of his mother at Westminster Abbey. Getty Images -
Meghan, Duchess of Sussex, sitting in a car as a British flag is reflected in its window. AFP -
Buckingham Palace household staff return through the gates of the palace after paying their respects. AFP -
Staff Sergeant Yeoman Darren Fowler, right, and Captain Rebecca Cooper from the Royal Signals at the Elizabeth Tower, checking that Big Ben Chimes in time with gunfire during the state funeral procession. EPA -
King Charles salutes as he is driven past Wellington Arch in London. Getty Images -
The London skyline is seen as the procession moves down The Mall. Getty Images -
The coffin of the queen is pulled on a gun carriage by Royal Navy sailors from Westminster Abbey. Getty Images -
Princess Charlotte arrives by car ahead of the funeral in central London. AP -
The coffin is carried into St George's Chapel for the Committal Service, in Windsor Castle. AP -
A woman cries in London's Hyde Park while watching the funeral service. AP -
Prince George looks towards his father Prince William during the Committal Service at St George's Chapel. Getty Images -
Queen Elizabeth's coffin is driven along the Long Walk towards Windsor Castle. Reuters -
People waiting along the route that the coffin will be pulled on a gun carriage in central London. AP -
King Charles and the Queen Consort Camilla follow the coffin at St George's Chapel. AP -
The Royal State Hearse arrives at Windsor Castle. Getty Images -
King Charles follows the State Gun Carriage as it carries the coffin at Westminster Abbey. PA -
Members of the public gather to see the coffin as it travels from Westminster Abbey to Wellington Arch in London. Getty Images -
King Charles and members of the royal family follow behind the coffin as it is carried into Westminster Abbey. PA -
The Imperial State Crown resting on the coffin. Getty Images -
The hearse transporting the coffin is covered in flowers thrown by the public. AFP -
The Bearer Party of The Queen's Company, 1st Battalion Grenadier Guards carries the coffin from Westminster Abbey. AFP
