Let’s start with the good news. This change of Prime Minister undoubtedly makes a difference for the better. The Conservatives have finally found a leader with a decent chance of making it until the next General Election, providing some much-needed political stability.
The financial markets have reacted positively too: the pound has strengthened, the cost of government borrowing has fallen, and investors have trimmed their expectations for how far the Bank of England will raise interest rates. This should ease the pressure on the cost of mortgages, in particular.
Investors prefer certainty and Rishi Sunak is, of course, a known quantity. The new Prime Minister’s credibility has been enhanced by his warnings of what might gone wrong if his predecessor lost the confidence of the markets.
Nonetheless, the economic situation remains difficult and could be about to worsen. There are two main challenges, but it will be hard to meet…
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Utopia, you are standing in it! 
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