LONDON (Reuters) -- Liz Truss took over as British prime minister on Tuesday, facing one of the most daunting set of challenges for an incoming leader in post-War history led by soaring energy bills, a looming recession and industrial strife.
Truss, the fourth Conservative prime minister in six years, flew to the royal family’s Scottish home to be asked by Queen Elizabeth to form a government. She replaces Boris Johnson who was forced out after three tumultuous years in power.
Truss inherits an economy in crisis, with inflation at double digits, the cost of energy soaring and the Bank of England warning of a lengthy recession by the end of this year. Already, workers across the economy have gone on strike.
Her plan to revive growth through tax cuts while also potentially providing around 100 billion pounds ($116 billion) for energy has rattled financial markets, prompting investors to dump the pound and government bonds in recent weeks.
She also enters the latest crisis to buffet Britain with a weaker political hand than many of her predecessors.
Having held a place in the cabinet of senior ministers for eight years, she defeated rival Rishi Sunak in a vote of Conservative Party members by a tighter margin than expected, and more of the party’s lawmakers initially backed her rival.
Johnson, who tried to cling on to power in July despite ministers resigning en masse over a series of scandals, told reporters and politicians gathered in Downing Street early on Tuesday that the country must unite.
After speaking outside the famous black door, he left London to travel to northeast Scotland and tender his resignation to the 96-year-old queen before Truss followed him into Balmoral Castle.
Johnson used his departure speech to boast of his successes, including an early vaccine program during COVID-19 and his staunch support for Ukraine in its battle against Russia.
He also listed “delivering Brexit” as one of his main achievements, although polls now show that a majority of people think leaving the European Union was a mistake.
Britain, under Conservative rule since 2010, has stumbled from crisis to crisis in recent years and there is now the prospect of a long energy emergency that could drain the savings of households and threaten the futures of businesses still weighed down by COVID-era loans.
Household energy bills are due to jump by 80% in October, but a source familiar with the situation has told Reuters that Truss may freeze bills in a plan that could cost towards 100 billion pounds ($115.33 billion), surpassing the COVID-19 furlough scheme.