Liz Truss’s proposed unfunded tax cuts caused people to worry that the government would lose huge amounts of tax revenue, which would result in borrowing and thereby heighten interest rates. Therefore, the bond markets dropped and caused pension funds and investment companies to suffer huge losses. Furthermore, the pound fell to its lowest level ever against the dollar, attracting more foreign tourism.
This turbulence adds to turmoil caused by Brexit, when the UK exited a fiscal arrangement with the EU and tried to make their own trade deals. The pandemic happened around the same time, which further complicated trade deals and exasperated economic woes.
Jon says he thinks Rishi Sunak, the new UK prime minister who has replaced Truss, may run the country more like a CEO than a politician. He hopes Sunak can help restore stability to the UK, which has been lacking these past few years due to changes in leadership, the pandemic, and economic turmoil.
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