Britain's new PM faces an 80s playlist: recession, unrest and runaway prices

By Andy Bruce and Kate Holton

RUNCORN, England (Reuters) - Britain's prime minister in waiting Liz Truss models herself on Margaret Thatcher, judging by her photo ops echoing famous images of the country's first female premier.

If Truss becomes leader of the ruling party on Monday as is widely expected, she'll need all the grit and guile of the Iron Lady as she walks into a scene straight out of the 1980s: a looming recession, industrial unrest and urban decay.

In a sign of the times, an area straddling the River Mersey near Liverpool that was once an industrial heartland now has a less illustrious claim to fame: families there are seeking protection from creditors at the fastest rate in the country.

South of the river in Runcorn, where business parks and logistics centres stand alongside boarded up shops and churches asking for donations for desperate families, ex-soldier Eddie Thompson is taken aback by what has become of his hometown.

Returning after 38 years in the military, Thompson quickly volunteered to manage food banks as the sight of so many people sliding into destitution, unable to cope with soaring food and energy prices, took him back to the bitter days of the 1980s.

"I think it's shocking," the 57-year-old told Reuters.

When Thatcher came to power in 1979, she inherited a stagnant economy, surging inflation and waves of industrial unrest that she crushed in the following years, bringing in the free-market policies that defined her legacy and endure today.

Rising through the party ranks, Truss has been photographed in a tank, wearing a Russian hat in Red Square and sitting astride a Triumph motorcycle, all resembling photos of Thatcher.

If Truss beats former finance minister Rishi Sunak in an election to lead the ruling Conservative Party and becomes prime minister, she will face similar strife.

Surging wholesale gas prices, driven higher by the Ukraine war, are hitting countries across Europe but Britain is particularly dependent on gas for electricity and heating, pushing its inflation rate above all other major economies.

Growth is stalling and workers smarting from years of non-existent real wage growth - from train drivers to barristers to nurses - are spoiling for a fight for higher salaries to compensate for inflation running at 10%.

On the campaign trail, Truss has said she will provide help but has not given details, beyond saying she prefers tax cuts to "handouts", while Sunak says support should be more targeted.

'THEY WILL BE PRAYED FOR'

The cost of the turbulence is evident in places such as Runcorn, where former soldier Thompson distributes emergency parcels to six food banks in the town helping those who cannot make ends meet - many of whom are in full-time employment.