The way I see it (again, from quite some distance), the Conservatives have given up on the next election and do not expect any leadership from Rishi Sunak.
Or rather, they do not want it. The recent convention made it very clear that they have little time to their own nominal leader of even to his appointed Ministers. They hope to create or consolidate distinct, better characterized power bases that do not necessarily involve the current or even the next government cabinet (which they might as well have already conceded to Labour).
In a nutshell, they have given up on actually governing and are in it now instead to grasp as much prestige, influence and money as they can from the directionless, inneffectual, deeply divided Conservative Party. And, of course, there are at least some that cling to the hope that the party will somehow swerve in significant numbers to their prefered perspective while also remaining a main political force in UK politics. The parallels with the current drama of choice of USA House Speaker could not be more illustrative.
I have to assume that both the Lib Dems and so-called "Reform UK" are waiting on the wings for a significant influx of new members in the months just before the next election - which, I hear, is at most fifteen months ahead. These latest by-election results may well be the trigger for some defections as soon as it becomes clear which factions are most likely to be heard for the time being, or at the lasted practical time for MP looking for reelection to switch parties for that election.
Worst case scenario, Nigel Farage decides again that he needs a bigger plataform while the Conservative Party decides that it can't be bothered to salvage even its superficial appearances of respectability anymore. And for some arcane reason people lend him their ears once again.
Best case scenario, Rishi Sunak decides (quite correctly) that there is no point to this pantomime, calls for General Elections ASAP, gets enough support to materialize them. Labour trounces the Tories. Lots of defections to Lib Dems and "Reform UK", even UKIP and the DUP. It takes a while for the extreme right wing and the so-called Euroskeptics to decide on somewhat stable configurations for their power bases again. Labour has at long last its turn to struct its stuff and fix some of the damage of the last seven years or more.
Either way, there will indeed be higher taxes (hopefully for those who can afford it best) and a long, protacted, painful road ahead for social and economic improvement. There is no other way, not with the current ideological composition of the UK.
The practical concerns now are when that will be pursued, at what political and financial price, by whom exactly, and with which degree of public support. It is entirely possible that we still have several more very destructive flip-flops ahead in the next few years, particularly while the Brexit mentality insists on refusing to die its very well deserved death.