👨💼🇬🇧 The UK's Rich Finance Bro as PM
Happy Hump Day everyone,
Following the theme of covering major political news from countries aside from the U.S. (see last week’s feature on China’s Xi Jinping and his unprecedented 3rd term), this week, we cover the U.K.’s new Prime Minister Rishi Sunak and the months of turbulence leading up to his rise to power. Sit tight because it’s been a bumpy ride for all the Brits out there.
Enjoy this week’s Hump Days!
- Humphrey, Rickie & Tim
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Featured Story
After months of turbulence, Britain seemed to finally show signs of stability after Rishi Sunak became the first prime minister of color on Tuesday. At 42, Sunak becomes the country’s youngest leader in modern times in addition to being one of the wealthiest politicians in Westminster from his time as a former hedge fund boss and Goldman Sachs banker. Sunak steps into leadership of the Conservative Party and is tasked with steering a deeply divided country through an economic downturn.
With Sunak’s rise to power, he becomes the third leader in less than two months. Although, Britain’s issues stem long before that. Let’s give you a timeline of how we got here.
In July of 2019, Boris Johnson was elected Prime Minister and immediately re-opened Brexit negotiations which led to the U.K. withdrawing from the E.U. in January 2020. The timing couldn’t have been much worse because, on top of entering into a major transition period, Covid measures became a major issue just a few months later. Johnson was photographed at gatherings in violation of the Covid regulations, dubbed “Partygate”. Additionally, Johnson was involved in two donation scandals, one of which involved a chain of mobile phone stores funding Johnson’s personal trip to the Caribbean and another involving the refurbishment of his Downing Street flats which went 4x over the taxpayer budget and was footed by an undisclosed donor. In July 2022, Johnson announced his resignation and appointed his successor: Liz Truss, who would take the helm in September 2022.
Liz Truss took leadership of the Conservative Party on Sept. 5, 2022, and days later, was faced with a shock when Queen Elizabeth II passed on Sept. 8. After that, Truss began unveiling her sweeping economic reforms that involved a series of unfunded tax cuts which resulted in a massive sell-off in government bonds and prompted the Bank of England to intervene before the financial markets collapsed. Truss drew criticism from the IMF and from President Joe Biden for introducing fiscal stimulus at a time when the Bank of England was raising rates to combat inflation. Truss then resigned after 45 days, becoming the shortest-serving U.K. Prime Minister.
This leads us to the present day where Sunak told his lawmakers in parliament that they face an “existential crisis” and must “unite or die”, and that he will make it his priority to bring the party and the country together. Although, critics of Sunak say he is too rich to understand the day-to-day economic pressures building in Britain, which have been compounding ever since they voted to leave the E.U. in 2016.
Sunak will be expected to make deep, painful spending cuts to try to rebuild Britain’s fiscal reputation after Truss’s misfires raised the cost of borrowing and caused many investors to flee. This is a very delicate time for British politics and Sunak is tasked with navigating the economic issues as well as the ideological issues moving forward.
Weekly News Roundup
U.S. Budget Deficit Cut in Half for Biggest Decrease Ever Amide Covid Spending Declines (CNBC)'
Though still large in historical terms, the budget deficit declined to $1.375T compared to the 2021 deficit of $2.776T, representing the biggest drop in history following two years of huge Covid-related spending. Contributing to the budget deficit decline, was the $850B increase in revenue. The revenue total of $4.896T is by far the highest ever for the U.S. government.
Rishi Sunak to Become the Next U.K. Prime Minister After Months of Turbulence (Reuters)
Rishi Sunak, the new Prime Minister of the U.K., becomes the youngest leader in modern times as well as one of the wealthiest. Sunak is Britain’s third leader in less than two months and takes over during one of the most turbulent eras in British political history. The multi-millionaire former hedge fund boss will be expected to make deep spending cuts to try and rebuild Britain’s fiscal reputation on top of being the voice of unity and stability within parliament.
HY: The Times of London estimated this year that Mr. Sunak and his wife, Akshata Murty, were worth more than $800 million, placing them among the 250 wealthiest British people or families.
Musk Plans to Cut Twitter Workforce by 75% (Bloomberg)
Elon Musk’s $44B purchase of Twitter is set to close by Oct. 28 includes reducing the social network’s staff to just more than 2,000 people compared to the 7,500 it currently employs. Musk also said earlier this month that he would follow through with his agreement to take Twitter private, ending a months-long court battle over the deal.
HY: Curious to see where this goes and if he actually does fire that much of the workforce if he closes the deal. Also, it would be true Elon fashion if he closes the deal at 4:20pm on Friday.
Chart of the Week
Boston leaped over San Francisco to land in second place on the list of most expensive US rental markets, with New York still holding the crown.
The median one-bedroom rent in Boston jumped 5.9% this month from September to $3,060, according to a new report. In San Francisco, it dropped 2.6% to $3,020. New York’s median fell 2.3% to $3,860.
I've been following you on TikToc for a while but am fairly new to Hump Days. I see each one is signed by you, Rickie and Tim. Would you please introduce your team? Who are Rickie and Tim? Thanks