LONDON — Britain will welcome its third female prime minister in Liz Truss, who won the race to succeed Boris Johnson at the helm of government, and as head of the Conservative Party.
Truss, 47, who has been serving as foreign secretary in Johnson’s cabinet, beat rival Rishi Sunak with 57.4% of the vote in an election process that began following the collapse of Johnson’s government in early July.
Truss had been widely tipped to win the election, which was decided by a little more than 170,000 Conservative Party members.
The weakening pound held steady against the dollar and the euro on Monday, with Truss’ victory already factored into the equation, and with rising inflation and fuel prices weighing on the currency.
The pound was worth $1.15 and 1.16 euros in early afternoon trading, following the announcement. Earlier in the day, it dipped to an historic low of $1.14 during trading in Asia.
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In her brief acceptance speech on Monday, Truss vowed to “cut taxes, grow the economy and deliver on the energy crisis and the long-term issues with energy supply.”
Truss reiterated that she stands for “freedom, low taxes, personal responsibility and the ability to control one’s own life. I will govern as a Conservative.”
Her government is expected to spend more money on helping families and businesses with fuel costs than Johnson’s government spent on furlough payments during COVID-19. She has pledged 100 billion pounds in public funds on the scheme, which is set to be unveiled within the week.
Despite the dismal economic climate in the U.K., Truss was bullish throughout the campaign, in contrast to her rival Sunak who, as Chancellor of the Exchequer, favored higher taxes. He believes that putting more money in people’s pockets would only fuel inflation.
The inflation rate in the U.K. is currently at 10.1%. Inflation is projected to peak at 14% later this year, with interest rates also set to rise in the coming months, reaching 3% by the end of 2023, according to the British Chambers of Commerce.
The country is also widely expected to enter a recession in the fourth quarter of 2022.
In her acceptance speech, Truss thanked her predecessor Johnson, calling him her friend, and giving him credit for “getting Brexit done,” for the vaccine rollout during the pandemic, and for standing up to Vladimir Putin following Russia’s invasion of Ukraine. She said Johnson was admired across Europe for his diplomatic efforts.
Truss also expressed her confidence that the Conservative Party would win the next general election in 2024, despite the many challenges government now faces, with multiple pressures on the economy, and British citizens.
During her acceptance speech, Truss wore a deep purple dress by Winser London. The dress is priced at 185 pounds and the Winser website describes it as “a power dress with plenty of body con wow factor.”
On Monday British newspapers were already outlining the tough job that lies ahead for Truss, with The Times saying she’ll likely face “the most challenging set of circumstances since Margaret Thatcher” took office, while The Guardian declared that, when she enters Downing Street on Tuesday, she’ll be staring down “an economic emergency that is unprecedented in peacetime.”
Helen Brocklebank, CEO of the luxury business lobby Walpole, said Truss takes office at a time of “exceptional political and economic turbulence. The government must urgently get control of energy prices and inflation which are flashing red lights on the dashboards of all businesses, and firms will likely require bespoke financial support moving forward.
“In the longer term, the prime minister’s commitment to growth is a welcome one, and if she can improve the U.K.’s competitiveness through reforming tourist visas, reintroducing tax-free shopping and boosting trade links across the world, then the luxury sector will continue to generate the jobs and growth the U.K. needs for long term prosperity.”
Dee Corsi, chief operating officer of New West End Company, which represents retail, consumer and hospitality businesses in central London, said the organization supports Truss’ “ambition to focus on a thriving London economy as a key component in ensuring that the wider U.K. remains globally competitive.”
“We look forward to working with her and the new cabinet to rebuild trade across London’s West End and support the one in eight Londoners who work there. As the country leans into harsh economic headwinds, it is crucial that the new prime minister and her wider government prioritize measures that unlock business growth — namely a fundamental review of business rates, the reinstatement of tax free shopping and a re-evaluation of the U.K. visa system.”
On Tuesday, Truss will travel to Balmoral Castle in the Scottish Highlands. There, Queen Elizabeth II will officially ask her to form a government and become prime minister.
This is the first time that the queen has received a prime minister in Scotland, where she is currently on her summer break.
This story was reported by WWD and originally appeared on WWD.com.
