Can the economy recover without spending cuts? The Wall Street Journal writes on a slow recovery from the Treasury after Bowler’s appointment as prime minister

But that recovery has stalled. On Monday, the pound was trading around $1.10 amid skepticism that the government’s plan would expand the economy as promised, and that instead large public spending cuts would be necessary.

“Rising funding costs, tighter financing conditions, including for mortgage borrowers, and increased uncertainty will outweigh the impact of looser fiscal policy” next year, analysts at the ratings agency wrote. They expect Britain’s economy to enter a recession in this quarter. The agency has already changed its ratings outlook for Britain to negative.

The government’s plans were rebuked many times. For example, the International Monetary Fund encouraged the government to re-evaluate the tax cuts, which it said would increase inequality.

Ms. Truss, as Prime Minister, has made clear that she wants to run the economy in a different manner than her predecessors. One early decision was to fire the top civil servant in the Treasury, Tom Scholar, a move that rattled some analysts. James Bowler spent two decades at the Treasury before being named his successor on Monday.

Two Months of the Edinburgh Reforms: Securing UK Financial Services with a Big Bang 2.0 and an Empirical Banker’s Check

Just two months after UK markets suffered their worst meltdown since the global financial crisis, the British government is promising a major relaxation of financial regulation in a bid to shore up the country’s banking and insurance industries against growing competition from cities such as Amsterdam and Paris.

The measures were dubbed the Edinburgh Reforms by the UK Treasury. These include an effort to make it easier for companies to list shares in London, a rethink of short-selling regulations and an addition to the mandate of top regulators, asking them to take account of growth and UK competitiveness when setting rules, instead of just focusing on the smooth and safe functioning of the financial system.

Prime Minister Rishi Sunak’s government is also looking at easing post-2008 rules on separating the trading and retail activities of big banks, as well as reviewing a regulation that made top managers in the banking sector accountable for their conduct. The government is reported to be sticking with plans to scrap a cap on bankers’ bonuses, another rule intended to regulate excessive risk-taking.

“We are committed to securing the UK’s status as one of the most open, dynamic and competitive financial services hubs in the world,” Jeremy Hunt, the UK finance minister, said in a statement.

The effort was initially touted as a “Big Bang 2.0” — a nod to the rapid deregulation of UK financial markets under former Prime Minister Margaret Thatcher in 1986. The reforms are expected to be gradual, which has made ministers move away from that language.

The decision to change the rules is to make sure London retains its role as a global financial hub after the UK leaves the EU.

Yet they also come on the heels of a major financial shock. The pound to a record low against the US dollar was sent down by investor blowback to the former Prime Minister’s plans to cut taxes while increasing government borrowing. The Bank of England had to intervene to avert a wider crash.

But there are some in the sector who back regulations such as the “ring-fencing” rules. They think the requirement that banks separate more risky investing activity from their business managing customer deposits could help guard against shocks, and make it less likely the government would need to use taxpayer money to bail out failing banks.