Britain’s new finance minister, Iraqi-born Nadhim Zahawi, has inherited a cost-of-living crisis that risks pushing Britain’s economy into recession.
The former education secretary was parachuted into the Treasury Department late Tuesday after the shock resignation of his predecessor Rishi Sunak over the scandalous culture that plagued Prime Minister Boris Johnson.
Johnson also lost his health minister, Sajid Javid.
Zahawi is taking control of UK inflation at a 40-year high of 9.1 percent, a level the Bank of England (BoE) says will reach double digits this year on rising energy and food prices.
“I have to make sure we get through … (this) inflation, which can be a really painful thing if we let it get out of control,” the 55-year-old told Sky News on Wednesday.
The self-made millionaire co-founded the well-known polling company YouGov and was active in local Conservative politics in London before becoming an MP in 2010.
The BoE warned on Tuesday that the global economic outlook had “deteriorated significantly” amid runaway prices fueled by Russia’s invasion of Ukraine.
The central bank has hiked UK interest rates five times since December in a bid to tame inflation.
The British government, meanwhile, has tried to ease the financial hardship with a range of measures, including a slight reduction in fuel taxes.
But critics said the moves fall far short of what is needed to help cash-strapped households and businesses.
– “Hard decisions” –
“You don’t go into this job to have an easy life,” Zahawi added on Wednesday.
“You make some difficult decisions every day. And sometimes it’s easy to walk away, but actually it’s a lot harder to deliver for the country.”
Zahawi denied threatening to leave the government if he didn’t get the top Treasury post.
“I want to make sure that we not only have to rebuild the economy, but that we have to let the economy grow,” added the new Chancellor of the Exchequer.
Zahawi declined to comment to reporters as he left a meeting at 10 Downing Street on Tuesday, including whether he would uphold Sunak’s pleas for fiscal discipline against Johnson’s spending instincts.
In early London trade on Wednesday, the benchmark FTSE 100 stock index was up 1.6 percent and the pound stabilized against the dollar.
The FTSE was down nearly 3 percent on Tuesday and sterling was down nearly 2 percent against the dollar as fears of a global recession mounted.
“Political risks don’t appear to be having a major impact on UK assets,” noted Markets.com analyst Neil Wilson.
“Right now we have far too many bigger things on our minds – inflation, economic slowdown, strikes.”
The UK is in the midst of nationwide strikes – particularly affecting the transport sector – as soaring inflation erodes wages.
Teachers and workers at the state-run National Health Service are considering joining the aviation, judiciary, postal and railroad staff.
– Role of the Covid vaccine –
Zahawi has received much praise for overseeing the rollout of pandemic vaccines in the UK.
But like Sunak, his private fortune has drawn negative attention, including when he claimed parliamentary spending on heating his horse stables in 2013.
Zahawi was born in Baghdad to a Kurdish family who moved to the UK as a child and spoke no English.
He has credited the poems of Philip Larkin with helping improve his English skills before he studied chemical engineering at University College London.
Zahawi is MP for Stratford-on-Avon, which includes William Shakespeare’s birthplace Stratford-upon-Avon.
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