The UK’s new finance chief, Zahawi, inherited the economic crisis

LONDON: Britain’s new Iraqi-born Chancellor of the Exchequer Nadhim Zahawiinherited a cost-of-living crisis that risks pushing the UK economy into recession.
The former education minister was parachuted into the Treasury late on Tuesday after his predecessor Shocking resignation of Rishi Sunak because of the culture of scandal plaguing the prime minister Boris Johnson.
Johnson also lost his health secretary, Sajid Javid.
Zahawi takes charge UK inflation at a 40-year high of 9.1 percent, a level that will hit double digits this year on rising energy and food prices, according to the Bank of England (BoE).
“I have to make sure we get through … (this) inflation, which can be a really painful thing if we let it get out of hand,” the 55-year-old told Sky News on Wednesday.
The self-made millionaire co-founded the famous polling company YouGov and was active in local Conservative politics in London before becoming an MP in 2010.
The BoE on Tuesday warned that the global economic outlook had “deteriorated significantly” due to the run-up in prices fueled by Russia’s invasion of Ukraine.
The central bank has raised UK interest rates five times since December in a bid to tame inflation.
The the UK government meanwhile, it tried to ease the financial pain with a range of measures, including a slight cut in fuel tax.
But critics said the moves fell short of what was needed to help households and businesses in financial difficulty.
“You don’t go into this job to have an easy life,” Zahawi added on Wednesday.
“You make some tough decisions every day. And sometimes it’s easy to leave, but it’s actually much harder to achieve it for the country.”
Zahawi denied threatening to leave the government if he did not get the top post at the Finance Ministry.
“I want to make sure that we not only restore the economy, but we also have to grow it,” added the new finance minister.
Zahawi declined to comment to reporters as he left a meeting at 10 Downing Street on Tuesday, including on whether he would support Sunak’s calls for fiscal discipline against Johnson’s free-spending instinct.
In early London trading on Wednesday, the benchmark FTSE 100 jumped 1.6 percent and the pound steadied against the dollar.
The FTSE tumbled almost three percent and sterling fell almost two percent against the dollar on Tuesday on growing fears of a global recession.
“Political risks don’t appear to be having much of an impact on UK assets,” Markets.com analyst Neil Wilson noted.
“There are too many bigger things on our minds right now – inflation, the economic slowdown, strikes.”
Britain is in the midst of national strikes – particularly affecting the transport sector – as wages are eroded by rising inflation.
Teachers and workers in the state’s National Health Service are considering whether to join aviation, legal, postal and rail staff in walking out.
Zahawi won widespread praise for overseeing the rollout of pandemic vaccines in Britain.
But like Sunak, his personal wealth attracted negative attention, including when he claimed parliamentary expenses for heating his stables in 2013.
Zahawi was born in Baghdad to a Kurdish family who moved to Britain when he was a child, speaking no English.
He credits Philip Larkin’s poems with helping him improve his English before going on to study chemical engineering at University College London.
Zahawi is the MP for Stratford-upon-Avon, which includes William Shakespeare’s birthplace Stratford-upon-Avon.

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