The death of Queen Elizabeth II comes at an already unsettling time for the U.K.’s people and investors.
Only two days before the nation’s longest reigning monarch
died at her Scottish estate, Balmoral, she anointed Liz Truss as the fourth prime minister, in little over six years, to run the country.
The chopping and changing in the U.K. political ranks marks a continuing crisis of confidence that began with the 2016 Brexit vote. It contrasts with the Queen’s own
70-year reign which stretched back to Sir Winston Churchill’s time.
Truss’s new leadership was greeted with a selloff in long-dated British government debt, ahead of her emergency £150 billion ($174 billion) plan to freeze household energy bills for the next two years that has become a footnote in today’s newspapers.
The Queen’s reign spanned World War II rationing and today’s smartphone-led consumerism.
The U.K.’s decline as a global power in that time is echoed by the story of sterling. Once a reserve currency pegged at $2.80 in 1952, this week it touched
a 37-year low of $1.14 on fears of a
coming recession and surging inflation.The strength of the dollar buys around 14% more for travelers to London compared to a year ago.
Since 1952, the U.K. economy has grown fivefold, shifting from manufacturing to services and improving living standards immeasurably. Investors have also done well, with the broadest measure of equity markets increasing in value
40 times since 1962, the earliest data available on
FactSet.
Truss’s new finance minister, Kwasi Kwarteng, wants to foster more progress. He is promising a second “Big Bang” mirroring the market deregulation of 1986 that made London a global financial capital and aims to attract more tech sector listings in the hope of rivaling the Nasdaq, which includes
Facebook-owned Meta Platforms and
Microsoft among its biggest names.
The Queen’s intervention in money matters was slight, once asking economists in the aftermath of the 2008 global financial crisis: “Why did nobody notice it?” But her real value to the country, as a totem of stability, was priceless.
—
James Ashton