Bookie odds favour Sunak return as Truss struggles to save sinking ship

With Britain’s Prime Minister Liz Truss battling to stay afloat, her former rival Rishi Sunak has turned bookies’ favourite to make a comeback for 10 Downing Street.

This week will be crucial for Truss, as financial markets deliver a fresh verdict on her economic reset. Conservative Party members are already breathing down her neck.

By Sunday evening, three Tory MPs were publicly calling for Truss to quit and may others said privately that they would write to Graham Brady, chairman of the backbench 1922 Committee, urging him to change party rules so that a vote of confidence can be held against Truss.

Also read: UK PM Liz Truss may be ousted by this week: Report

Truss has “undermined Britain’s credibility as a trustworthy, responsible leading economy, and fractured our party in a potentially irreparable manner,” Tory MP Jamie Wallis said in a letter calling for her resignation. “You no longer hold the confidence of the country or the parliamentary party.”

Sunak supporters step up efforts

Spooked by a record poll deficit against Labour, the Tories now believe they face electoral meltdown if Truss is allowed to stay in post. Supporters of Rishi Sunak, who came second to Truss in the Tory leadership contest earlier this year, stepped up efforts over the weekend to secure support to install him.

Former chief whip Julian Smith has been in touch with multiple Conservative MPs to gauge support for Sunak, bypassing another vote from the party’s grassroots supporters. Mel Stride, a vocal critic of Truss and a Sunak supporter, was scheduled to host a dinner for MPs on Monday evening, following a similar event last week.

Also read: Rishi Sunak’s loss leaves Tories sharply divided in Liz Truss regime

According to insiders, Sunak, the UK-born Indian-origin politician, is steering clear of any accusations of plotting against Truss. Even as the Oddschecker bookies’ odds aggregator showed him as the favourite to replace Truss, he is spending time in his constituency of Richmond in Yorkshire.

He hosted two pre-scheduled parties at a central London hotel this week to thank his Ready for Rishi campaign team and officials at the UK Treasury. “His approach is one part ‘I told you so’ but rather more a sense of sadness. He just says: ‘It didn’t have to be like this’,” The Sunday Times quoted a friend of Sunak’s as saying.

Sunak had warned about meltdown

But the mutinous voices within the Tories continue to flag how Sunak had warned about much of the financial meltdown that would follow his rival’s unfunded tax-cutting policies. In a desperate bid to save her sinking ship, Truss recently sacked her trusted aide Kwasi Kwarteng for enforcing her own economic policies as Chancellor of the Exchequer.

Truss spent Sunday huddling with new Chancellor of the Exchequer Jeremy Hunt, her pick to restore stability after her economic plan triggered a sell-off in UK assets. Hunt spent the weekend outlining a radically different fiscal approach—taxes would have to rise and spending would have to be cut—in a bid to prevent further punishing increases in UK government borrowing costs.

Also read: Damage control: New UK Finance Minister Jeremy Hunt warns of tax hikes

Truss was also scheduled to host a reception for the Cabinet at 10 Downing Street on Monday evening to continue to get their input into a medium-term fiscal plan, which Hunt will announce on October 31, according to an official. She will also host meetings with all Conservative MPs this week to get their feedback, the official said.

Imminent Truss ouster unlikely

The pound rose in early Asian trading on Monday, as investors speculated that more of Truss’s package of unfunded tax cuts might be reversed. FTSE 100 futures slid as much 0.6% at open, although faring better than the Euro Stoxx 50 contracts.

Also, Truss’s position is protected by a one-year immunity clause under current Conservative rules. About two-thirds of the party’s nearly 360 MPs need to tell the 1922’s executive to change the rules before it would do so, said a person familiar with the rules. That means an imminent ouster of Truss is not likely. The executive will not meet until Wednesday, the person said.

Still, Truss could limp on for weeks or months with the markets calmed, her policy platform reversed, and Hunt effectively in charge, according to a senior Conservative operator. This is the most likely outcome, the person said, because there is no unity candidate, and enough MPs want to give Hunt a chance.

(With agency inputs)