British PM Rishi Sunak admits UK's reputation has taken a hit; aims subtle dig at Truss

UK PM Rishi Sunak is attending the G20 summit held in Bali, Indonesia. On the sidelines of the summit, he gave an interview to BBC, in which he admitted that the UK's reputation has gone down, after the economic chaos, which emerged during Liz Truss' short tenure. "Well, obviously our reputation took a bit of a knock as a result of what happened more recently," said the British PM. However, he was quick to add that he has witnessed an enormous amount of goodwill for the UK, at the G20 summit. 

Sunak faces the challenge of resolving the UK's economic crisis whilst ensuring that the budget deficit remains in control. If he cuts public spending, especially funding for the NHS, he will struggle at the ballot box. In the interview, Sunak said that reducing inflation was his number one priority. The Autumn Statement on public finances will be announced on Thursday and it is expected that the British government will cut public spending by £35 billion.

Economic challenges the UK faces

The British government also plans to raise taxes on profits earned from selling shares and selling second homes. It is being reported that the council taxes might be raised as well, although it is not clear if the government can do that without a local vote. Sunak has assured pensioners by saying that pensions will rise to keep pace with the rising inflation.

The Tory party has a significant number of pensioners in its vote bank. A decision to not raise pensions to keep pace with inflation could likely witness a reaction from the party's base. 

Iain Duncan Smith, a former Tory party leader has warned that hike in tax rates will lead to a "deeper" slowdown. Sunak claimed that the approach taken by his government will be fair.

"People can see that yes, the approach we've taken is fair, yes the approach we've taken is compassionate when considered in the round. Taking a step back, the number one challenge we face is inflation. It's important that we get a grip of that. It's important we limit the increase in mortgage rates that people are experiencing," said Sunak.