Storm clouds Any sense of jubilation may prove to be very short-lived

Liz Truss is facing an economic storm ahead as soaring inflation and energy bills inflict pain on millions of families and businesses.

- Pippa Crerar

A month ago the new prime minister rejected “handouts” as the best way to help households through the worst income squeeze in 60 years, promising tax cuts and economic reform instead, and has stuck strictly to the script ever since.

But her ambitions to pursue a Thatcherite approach to the economy have since collided with the reality of the scale of the crisis. The Treasury has drawn up a suite of options for her to pick from, and the favourite – a freeze on energy bills – involves both big handouts and a huge price tag.

Labour is gearing up to attack Truss as an ideologue, focusing on her ambitions to tear up workers’ rights and reduce the size of the state, and with it public spending on already cash-strapped services like schools and hospitals. They have launched an advertising campaign on billboards across “red wall” towns, telling key voters “she is not on your side”.