A constant turnover of ministers doesn’t help deal with Britain’s economic issues

It says a lot about the current politics that Britain’s new chancellor found himself having to deny stories that he had threatened to quit the government unless he was given the job.

Nadhim Zahawi’s inbox is positively bulging, and that was before he lost one of his longest-serving and capable ministers in the form of City minister John Glen – his official title was economic secretary to the Treasury – who had been in the job for more than four years before he decided enough was enough.

While this was going on, the pound was busy falling off a cliff, recording a new two-year-low against the dollar barely had Zahawi wrapped up the morning media rounds. And that was just his starter for 10.

Elsewhere, a hotelier was complaining of turning guests away because of the staff shortages Brexit has delivered, emphasising another issue that the government has failed to get a grip on and would prefer to ignore. Reports were, meanwhile, circulating of domestic energy bills potentially hitting £3,000 a year ahead of the winter. This just a day after the Lloyds Banking Group CEO was fretting about how most of their customers have less than £500 in savings. That’s no sort of a buffer. No wonder problem debt is ballooning.

And so the list went on. Tesco’s was involved in another row with a supplier of branded goods over soaring prices (Whiskas pet food this time). The construction purchasing manager’s index (PMI number, a gauge of future activity, showed a much sharper decline than had been expected.

Honestly, it’s a wonder Zahawi wanted the job at all, let alone that he found himself forced into the position of having to deny that he’d forced the prime minister’s hand to get it.

Just eight short months ago, he was basking in the warm glow of the Covid-19 vaccination programme, which was actually delivered by Kate Bingham, while he had the job of vaccines minister, with the rank of parliamentary under secretary of state in the Department of Health. Now he is in one of the great offices of state. That’s some rise.

It’s here that things get sticky, because the economy is in a godawful mess, people are suffering real pain because of it and Zahawi is supposed to help sort it out but without the assistance of a Kate Bingham.

It was almost surreal watching Prime Minister’s Questions as his boss repeatedly banged on about “the strength of the British economy”. Only someone with as sketchy a grasp on reality as Boris Johnson’s could make that claim as currency traders were heading for the exits almost as fast as members of Johnson’s government. Analysts said that this was not down to the turmoil in Westminster. It was motivated by concerns about that “strong” economy. Its torpid growth. Stagflation. The grim picture painted by the Bank of England just the day before.

Revolving doors at Westminster? We take those in our stride. Except that revolving doors at Westminster do play a role.

If the markets had confidence about the people with their hands on the tiller then the pound would surely be stronger, the inflationary risk posed by its fall would be less.

Zahawi needs to change perceptions fast, assuming he manages to cling on to the job for more than a few days, which is open to question given the dismal state of the government.

A weak currency pushes up the price of imports and commodities. The cost of living crisis, his biggest problem, gets worse.

The Bank of England has had Monetary Policy Committee (MPC) members indulging in tough talk (again) in an attempt to talk up the pound in the past few weeks. First up was Sir Jon Cunliffe, deputy governor, in a BBC interview. “We will do whatever is necessary to ensure that as this period of inflation goes through the economy, it does not leave us with a persistent domestically-generated inflation problem,” he said.

Then chief economist Huw Pill said something similar in a speech: “I see my role as an MPC member as being ‘in the price stability business’. That means returning inflation to the 2 per cent target in a sustainable way. If there is one message that a wider public audience takes away from my remarks this morning, I hope it is that.”

But actions speak louder than words and when other big central banks were doing what it took by juicing interest rates by 0.5 per cent, the MPC dawdled.

Still, one almost feels pity for its members, given the fraught politics they have to navigate in addition to the economic woes that are all too clear.

Rishi Sunak quit No 11 in part because despite the record spending on his watch (a consequence of the Covid pandemic) he still buys into the concept of sound public finances and was reluctant to go along with Johnson’s desire for unfunded tax cuts to save his skin. Which, needless to say, would be inflationary.

As it is, the prime minister is probably not going to be around long enough for that to be an issue. Zahawi will be in a holding pattern until No 10 has a new permanent resident, hopefully one capable of formulating an economic strategy more coherent than “save Big Dog”, one which involves helping the most vulnerable people weather those price rises, which only seem to be getting worse.

Sadly, there isn’t much in the way of what the City likes to describe as “upside risks” on the horizon.