Truss has talked in her campaign about the need to cut taxes and foster enterprise, which ought to be standard fare for a Tory but this has prompted concerns about rising public debt. Truss and her allies have made the “supply side” argument contending that lower taxes stimulate growth, although it remains arguable whether tax cuts at a certain point can pay for themselves. 

Here is a list of wealth managers’ reactions.

Samuel Mather-Holgate, independent financial advisor at Mather and Murray Financial
Truss has a huge to-do list. She will want to get over to Ukraine and show her support there as well as making calls to Biden and the EU as the Northern Ireland Protocol will probably dominate her tenure. However, the cost of energy will be her number one priority. It will be interesting to see who Truss surrounds herself with in cabinet. The chancellor will be a massive appointment for someone, and we all think it will be Javid. What will he do to support households? I think the £400 ($460.7) direct payment on bills will be doubled.

Graham Cox, director at SelfEmployedMortgageHub.com
Liz Truss has certainly got her work cut out. I think she's broadly got the right idea that taxes need to be cut.  We can't tax our way out of our debt mountain, we need to aggressively grow the economy. That means raising personal tax allowances, lowering income tax and reversing increases to National Insurance and corporation tax. The elephant in the room is corporate offshore tax evasion. We could transform the economy and living standards if we were to finally get serious about confronting this issue, rather than enabling it. In the short-term, Truss must address the cost-of-living crisis. An energy cap freeze appears to be the only way out because we just don't know how expensive energy will become, or for how long.

Philip Dragoumis, director, and owner at Thera Wealth Management
It will be impossible for Truss to keep all her commitments to cut taxes while at the same time announcing a government package at least as big as (if not bigger) than the one announced by Keir Starmer to help people deal with the rise in energy costs. The UK government bond market has recently been very concerned that Truss's government will be fiscally irresponsible and blow a hole in the public finances. The 10-year government borrowing costs have soared to almost 3 per cent from 1.6 per cent in July. We need some immediate clarity on the support package but also a clear pledge that finances will not be derailed, otherwise borrowing costs will spiral out of control.

Schroders UK equities specialists, Sue Noffke, Andy Brough, and Jean Roche
UK households face an income squeeze on multiple fronts in coming months. Double-digit inflation is expected by the end of 2022, alongside double-digit falls in discretionary spending, as the near doubling of wholesale gas prices since May 2022 feeds through into the retail energy prices paid by UK households. The median UK household income (after tax) is £31,400: a £1,500 rise in energy bills for the typical household amounts to around 5 per cent of annual income. The rise in mortgage costs look likely to be of a similar magnitude.

So far in 2022 household disposable income has grown due to a buoyant labour market and the drawing down of savings built up during Covid lockdowns. The income tracker from grocery chain ASDA (which started in 2011) shows a year-on-year decline for July 2022 of 16.5 per cent in UK household income (excluding bonuses) after tax and spending on essential items. This is equivalent to a loss of £40 per week. This is likely to fall much further.

The savings built during the pandemic – estimated at £190 billion – are not equally spread amongst households. Lower-income households typically have limited or no savings, and the poorest households will feel the squeeze more acutely than middle or higher-income households. Almost a quarter of all households have no savings and a further 9 per cent have savings of £250 or less. With inflation likely to exceed the 13 per cent peak forecast by the Bank of England (BoE), workers will be no better off by mid-2023 than they were 20 years earlier (according to research by the Resolution Foundation).

Chris Beauchamp, chief market analyst at IG Group, the trading platform
Policy-wise, she has to provide the grip on the energy crisis that has been lacking over the summer. But she will face a brewing row with the EU over Northern Ireland and must cope with these issues while grappling with a rancorous Tory party, with only a third of the party having backed her. She thus finds herself at risk of exposing her flanks to a leadership challenge, either on the basis of going soft on Brexit or of failing to sort the energy crisis. It will be a short honeymoon period.

Markets-wise, there has been little reaction since the announcement was very much a foregone conclusion. But with the pound wallowing against the dollar, it is clear that markets are none too optimistic about the outlook for the UK. Perhaps a big enough programme of support might win her a reprieve, but investors will be watching closely.