For Britain, this is annus terribilis

Thirty years ago, the Queen described the year that was 1992 as an annus horribilis. For the British 2022 is worse – an annus terribilis.

As one wag put it, in 45 days Liz Truss has managed to bury the Queen, the pound and the Tories. Even Henry VIII’s fourth wife, Anne of Cleves, lasted longer.

There have been four chancellors of the exchequer in four months and three home secretaries in seven weeks. The Financial Times is calling for a national election, ergo a Labour government led by Keir Starmer.

Yet of all the options for Britain, a Labour government before 2024 is the least likely – far less likely, for example than another led by Boris Johnson.

It is all too easy to ventilate over the carnage that Truss and her one-time chancellor, Kwasi Kwarteng, has wrought in 44 days. They shunned the Office of Budget Responsibility. And they shirtfronted markets with £45bn ($80bn) of unfunded tax cuts in the name of growth as borrowing costs were climbing.

Liz Truss has had the shortest career as British prime minister in history. Picture: AFP

The panic in the bond market led the Bank of England, in the midst of tightening monetary policy, to prop up pension funds which had been caught short. The pound fell to $US1.01.

But look at the new day.

Truss is gone. She resigned in under 90 seconds. She did not have to be ousted. Chancellor Jeremy Hunt’s reversal of almost all the tax cuts has brought the pound back to US$1.13. And on Thursday the BoE signalled that rates might not rise by as much as feared.

Credit agency Moody’s is expected to change Britain’s outlook from stable to negative and S&P flagged a downgrade on Friday.

However the scrapping of most of the Truss tax changes and the prospects of Hunt’s Halloween fiscal statement – full of difficult decisions to attack the £40bn hole – has curbed downside risk.

Read the British media and a Labour government is a shoo-in. Sure, the Truss trashing of the Conservative Party’s reputation will hurt. It has turned Starmer from dull incubator to leadership material. But two years is a very long time in politics.

Labour leader Sir Keir Starmer is relishing the turmoil of the Tories. Picture Getty Images

This is why Johnson, the leader who secured an 80 seat majority in 2019 before hoisting himself on his own Partygate petard, is back in contention. His odds may be tightening by the hour.

What markets always want is certainty. Whoever the new prime minister is will be known within a week. One of two candidates who gain at least 100 of the 360 MP votes will emerge by Monday. Online voting by 170,000 party members will be done by next Friday, ahead of the fiscal statement.

Those in contention include Johnson, former chancellor Rishi Sunak – who lost out to Truss in the leadership and predicted the economic fallout of her actions – and cabinet ministers Penny Mordaunt and Ben Wallace.

Among the Tory membership who will vote for the candidates selected by MPs, a YouGov poll last week put Boris Johnson firmly in the lead with 32 per cent, Sunak in second with 23 per cent, Ben Wallace at 10 per cent and Mordaunt with nine per cent.

Kwasi Kwarteng was sacked as chancellor of the exchequer. Picture: Getty Images

Come back Boris, all is forgiven would seem to be the message from the membership.

Jeremy Hunt has ruled himself out of contention and could well stay on as chancellor. Michael Gove has also ruled himself out. Right wingers Suella Braverman, the home secretary sacked by the prime minister last week and Kemi Badenoch are both seen as untested, much like Liz Truss.

There are early reports of manoeuvrings: a dream team of Rishi Sunak as PM, Hunt as chancellor and Mordaunt as foreign secretary could be quashed by Mordaunt’s desire to run. Yet she too lacks experience in high office.

Some of Johnson’s backers are courting Sunak to return as chancellor, others only see his betrayal of Johnson and his high taxing policies. On Friday, Sunak’s polling for votes among the party’s MPs had him in the lead.

Johnson, who cited Cincinnatus when he stepped down in front of Number 10 has been ploughing the fields – in the Caribbean on holiday – and is tearing back to Britain over the weekend. The fifth century centurion was called back from the fields to save Rome.

The current Chancellor of the Exchequer, Jeremy Hunt. Picture: Getty Images

The ousted prime minister still faces an investigation by the parliamentary privileges committee on whether he misled MPs by repeatedly denying that he broke Covid-19 health laws. The police later fined him for attending an illegal gathering during lockdown.

Given this hypocrisy a Johnson victory would trigger resignations from some backbenchers.

But the government maintains a huge Tory majority in the Commons to buffer a walkout.

There are other conservative MPs along the Red Wall in the North of England who owe their seats to Johnson and could see him as best placed to at least save some of the furniture. For these MPs, the prospect of a return to civilian life with higher bills to pay might sway support.

Complicating the weekend machinations is the ghost of Brexit. The fiscal incompetence by the pro-Brexit Truss and the market fallout has been seized on by the old Remainer camp as an opportunity to right the wrongs.

Brexiteers are on a mission to stop any slide back towards Brussels and are deeply suspicious of even the late converts.

A return by Boris Johnson would likely trigger a backbench revolt and more resignations. Picture: AFP

Johnson, Sunak and Mordaunt voted for Brexit. Hunt and Wallace voted to remain in Europe.

Whoever walks in to Number 10, no one can expect a honeymoon. Economically Britain is not over the worst. Hunt’s whatever-it-takes repair job is expected to freeze income tax thresholds, locking in bracket creep and to reinstate super profits.

The country is at the start of a long winter and if the multi-billion pound energy price support comes off in April, households face bills of £5000 a year, surely untenable in political terms.

Yet the status quo under Truss would have been untenable. “Dear oh dear,” as King Charles unintentionally yet prophetically muttered on meeting his new PM.

This is the start of a long week in British politics. Fraser Nelson writes in London’s Daily Telegraph that Johnson has a stronger democratic claim than any other. He is also the most adept to face off against Vladimir Putin.

Whoever emerges as Britain’s third prime minister this term, technically the Conservative government does not have to go to an election until the start of 2025.

By then, the PM must hope that inflation is tamed, market confidence has returned and energy prices have normalised.

Annus Terribilis as it has been, but one thing is certain about Britain: she will muddle through.