Prime Minister Liz Truss? Liz Truss has maintained and extended her lead over fellow Conservative leadership contender Rishi Sunak, despite several U-turns, most notably on regional public sector pay. According to Politico’s Poll of Polls, Liz Truss leads with the backing of 56% of Conservative members compared to Rishi Sunak’s 32% and 11% who don’t know. Neither candidate is currently performing as well among the wider electorate, however, with a YouGov poll finding that Liz Truss would not increase the Conservatives’ support.

  • Who’s who. Politico has produced a handy guide to Conservative MP support for each candidate, including analysis of the political breakdown of Truss and Sunak supporters. 80% of those publicly backing Truss, for example, either supported Brexit during the referendum or have publicly stated their conversion to Brexit, while just over 40% of Sunak supporters are pro-Brexit. More than twice as many ‘red wall’ Conservative MPs back Truss (12) over Sunak (5), while Sunak has nearly double the number of ‘Traditional Tory’ supporters than Truss. 
  • But, what about the members? Analysing the political divides behind Conservative member support for Truss and Sunak is a whole different story. The New Statesman’s Charlotte Ivers explains why demographic data on “the most powerful people you have never heard of'' is notoriously sparse and outlines the effect this has on polling.
  • Appealing to the right. What we do know about Conservative members is that they like right wing policies and that appealing to this majority faction may be the key to Truss’ success, argues polling expert John Curtice. 54% back Liz Truss’ tax cut pledge while only 37% agree with Rishi Sunak’s argument that tax cuts could fuel inflation.
  • Truss’ cabinet. As Truss remains the hopeful to be the next Prime Minister, speculation is well underway over who may be in her cabinet. Close ally and current Secretary of State for Business Kwasi Kwarteng is widely tipped to be chosen as Truss’ Chancellor. Kwarteng famously co-authored Britannia Unchained with the leadership frontrunner along with Priti Patel, Dominic Raab and Chris Skidmore. Others tipped for cabinet positions include Ian Duncan Smith, Suella Braverman, Simon Clarke and Kemi Badenoch
  • Jumping ship. The Mail on Sunday reports that several members of the current Sunak camp have been in talks with Team Truss about joining her campaign as her lead widens. 

Economic policy. Throughout the leadership contest, economic policy - particularly taxation - has been at the heart of deep divides between the two candidates. Tax cuts are central to Truss’ campaign, where proposals include reversing national insurance increases, cancelling the planned corporation tax rise and temporarily removing green energy levies on electricity bills. While her opponent argues that tax cuts could fuel inflation, Truss has maintained that her plan could actually avoid recession. (Read Politico's piece on how Trussonomics differs from the 'sound money' principles of previous Conservative governments.)

Politics. If successful, Liz Truss would be the first Conservative leader since Churchill to have been a member of another political party. Hailing from a family that she describes as “left of the Labour Party”, Truss went on to become president of the Oxford University Liberal Democrats which she has labelled a “youthful error”. Upon entering Parliament in 2010 and first joined the government in 2012 as a Parliamentary Under-Secretary for Education. 

Weekly Updates

Monetary policy and housing

Interest rate rise will do little to reduce inflation. The Bank of England’s Monetary Policy Committee voted to increase interest rates by 0.5% (the largest rate rise since 1995) as inflation is forecast to reach 13% in October. The decision has come in for criticism as one which will inflict economic pain without tackling inflation.

Weaning the UK economy off its addiction to house price inflation. UCL IIPP’s Laurie Macfarlane asks could the slowing down of UK house price growth “mark the beginning of the end for the great British housing boom?” and explains why a property market slowdown poses wider challenges for the UK’s economic model and requires a long term plan for transition.

Paradigm shift and fiscal policy

Bidenomics 2.0: The Inflation Reduction Act. After a long political battle in the United States, the flagship Inflation Reduction Act has been passed into law. Economics blogger Noahpinion collated resources summarising the Act, “a major piece of fiscal legislation that aims to increase supply via government promotion of investment, and decrease demand via taxes on the rich and powerful.”

The levelling up mask slipped. Rishi Sunak ‘boasted’ to Conservative Party members that he “started the work of undoing” public spending formulas which prioritised “deprived urban areas” over wealthy towns. The New Statesman’s Rachel Wearmouth reports.

Proposal for a UN tax convention. The Global Alliance for Tax Justice is calling for civil society organisations around the world to sign up and support a call for a UN tax convention, an international agreement to stop countries losing $483bn a year in global tax abuse by multinational corporations and wealthy individuals.  

Another blow to trickle down economics. Do corporate tax cuts boost economic growth? A peer-reviewed paper from Sebastian Gechert and Philipp Heimberger has concluded that “The literature on corporate taxes and growth has been biased towards over-reporting results according to which corporate tax cuts boost growth rates.”

Inflation and energy

Price controls to prevent price gouging in the US. A proposal has entered the US House of Representatives to give the White Houses’ Supply Chain Disruptions Taskforce powers to examine corporate earnings and expenses, and recommend setting targeted price controls in sectors like housing, health care, food, energy and transportation. (NB. PoliticsHome reports that the “worst-case scenario” for food price inflation in the UK is 20% by the end of 2022.)

CBI calls for emergency budget to tackle energy price rises. CBI Director-General Tony Danker has urged the outgoing Prime Minister to prepare a cost of living support package for the most vulnerable people and firms when the energy price cap is announced later this month, to be delivered via an emergency budget in September that can “support the most vulnerable people and firms through the autumn and winter”. (Leaked documents seen by Bloomberg show that the UK government is planning for "organized blackouts for industry and even households" for up to 4 days this winter under their latest "reasonable worst-case scenario".)


Energy Price Cap reform. BEIS Committee chair and Labour MP Darren Jones explains how the energy price cap “has morphed from a tool to help consumers to one that helps energy companies” and argues that it is “no longer fit for purpose”. Jones also called for more support for bill-payers this winter paid for via removing the investment loophole in the windfall tax and extending it to electricity generators. However, BBC’s Simon Jack suggests that “a quasi nationalisation intervention in the energy market…may be preferable as there is no guarantee people will spend money on paying energy companies which could see even remaining big retailers in danger”.

Climate change and finance

Financialisation and energy price rises. Commenting on Rupert Russell’s Price Wars. Ann Pettifor explains why governments struggle to stabilise energy prices when they are largely set by commodities traders speculating on future markets (deregulated by the Commodities Futures Modernisation Act of 2000): “Why should management of the fuel that threatens our ecosystem be beyond the reach and regulation of democratic (or even undemocratic) states and their citizens?”

Changing consumer demand. Global Action Plan has produced a series of essays explaining how to change the structure of demand across the economy in the interests of people and the planet. The series is authored by Andrew Pendleton, Larissa Lockwood, Natasha Parker and Jo Michell.

Green capitalism is a myth. Common Wealth’s Adrienne Buller explains why market based solutions to solving the climate crisis “are a deadly distraction from the urgent task of actually slowing, reversing, and adapting to climate and ecological crisis”. (Read her new book, The Value of a Whale for more.)

In defence of cash. Positive Money’s Simon Youel reviews Brett Scott’s Cloudmoney for Autonomy: “an essential guide to the actors attempting to displace cash and the wider social forces driving them, while putting forward a much needed defence of humble notes and coins.”


Ethnicity and heightened risk of very deep poverty. JRF’s Rachelle Earwaker and Peter Matejic analyse the levels and trends of very deep poverty and the impact of the cost of living crisis for different ethnic groups. Read their blog post for a summary of results, including that people from households headed by someone of Bangladeshi ethnicity have the highest risk of living in a cold home, and more. 

A gender equal living income. NEF are working with grassroots women-led organisations to hear about the main issues with the social security system and co-design their Living Income policy to ensure it promotes gender equality.