Liz Truss vs Rishi Sunak: How do they plan to fix high inflation?

Highlights:

• The leadership race is down to Liz Truss and Rishi Sunak.
• The country will get a new prime minister on Monday when Conservatives decide who'll lead the party.

The UK is all set to get a new prime minister tomorrow. The race is down to two candidates, former chancellor Rishi Sunak and foreign secretary Liz Truss, and the latter appears to be the more probable winner. In the polls of Conservative Party members, Truss has reportedly outrun 42-year-old Sunak and is poised to secure the top job. The winner will be announced on Monday.

Regardless of who wins, the challenges ahead of the next UK PM remain the same.

The top concern of all voters in the country right now is high prices. Inflation hit 10.1% in July, and the Bank of England (BoE) has projected it to rise more. However, several other experts have warned that it'll be significantly higher. Citibank forecasts that it'll hit 18% by early next year.

Truss and Sunak have made several announcements on how they plan to reduce the high prices. Truss has announced huge tax cuts 'from day one', and she also plans to reverse the increase in corporation tax from 19% to 25%, which was announced by Rishi Sunak when he was the chancellor. Sunak, on the other hand, claims that Truss' economic strategy would lead to an inflationary spiral, causing misery for millions. He has also pledged tax cuts but over time.

Average energy bills are estimated to rise to £3,549 a year from October after energy regulator Ofgem raised the energy price cap by 80% last month. The average yearly bills at present are £1,971. Truss has pledged to scrap green levies on energy bills, which is expected to bring them down by about 8%. Sunak has said he'll cut VAT on the bills, estimated to bring them down by 5%. However, these reductions are negligible compared to the 80% rise from October.

The Bank of England has warned that the country may fall into recession by this year's end. On this, Truss says it is worrying but not inevitable, stressing that her plans would help prevent the economic crisis. Sunak has countered, saying that unfunded tax cuts would just put fuel on the fire of inflation.

Overall, Truss is focusing on immediate tax cuts, while Sunak is stressing continuing with the current taxes but pledging more targeted support.

Besides the economy, the new PM also has a major responsibility - keeping the Conservatives together. Rishi Sunak's resignation in July led to a tsunami of resignations from the cabinet, eventually forcing Boris Johnson to quit as the PM. On the other hand, Truss remained loyal to Johnson and is seen as a continuation of him. 

It could be argued that this race is to replace the man at the top, but in reality, it is way more than that. The leadership race has revealed the underlying debate within the conservatives and what kind of issues they stand for.