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Liz Truss’ victory celebration as the new Tory party leader and thus new Prime Minister of the United Kingdom will be short. The UK is facing major problems in the coming weeks – the consequences of Brexit and the controversial Northern Ireland Protocol are just one of them. And what can the financial sector on the island expect from the former foreign minister post-Brexit?

His – then somehow surprising, if self-inflicted and laughable (“Hasta la vista, baby!“) – exit after two years and 348 days in office make Boris Johnson one of the shortest serving prime ministers in Britain’s recent history. Liz Truss, his successor as leader of the ruling Conservative Party and new head of government in the United Kingdom, could face an even shorter term. The next general election in the UK must take place in January 2025 at the latest. So Truss does not have much time to turn the tide for her party and the, more than any other G7 nation, crisis-ridden United Kingdom.

Truss cannot hope for a grace period in her new office: Already in October, energy bills for private households will rise by 80 per cent and for some companies by up to 600 per cent. Inflation is expected to exceed 13 per cent and possibly even 22 per cent early next year. Government debt has reached almost 96 per cent of GDP has already reached a level that makes all election campaign promises (tax cuts) rather unlikely.

Both Truss and her last rival for the post of party leader, ex-Chancellor Rishi Sunak, are supporters of Brexit. In the internal contest for the post at No. 10 Downing Street, which Truss won with 57.4 per cent of the votes cast, Britain’s exit from the EU hardly played a role. But that can change quickly in view of the ongoing problems around the Northern Ireland Protocol. And what does Truss’s victory mean for the British financial industry, which has been waiting for an Equivalence Agreement with the European Union waiting?

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