Rishi Sunak leads in race for UK leader, Boris Johnson yet to declare

London: Former British Treasury chief Rishi Sunak was the frontrunner on Sunday in the Conservative Party's race to replace Liz Truss as prime minister. Sunak garnered the public support of over 100 Tory lawmakers to forge ahead of his two main rivals: former Prime Minister Boris Johnson and ex-Cabinet minister Penny Mordaunt.

But widespread uncertainty remained after British media reported that Sunak held late-night talks with Johnson on Saturday. Speculation mounted that the pair could strike a deal to unite the fractured governing party after it was left reeling from Truss' rapid downfall following Johnson's ouster.

The Conservative Party hastily ordered a contest that aims to finalise nominations on Monday and install a new prime minister - its third this year - within a week.

Sunak enters race

Sunak, 42, was runner-up after Truss in this summer's Tory leadership race to replace Johnson after he was forced out by a string of ethics scandals. On Sunday, he confirmed he was running again in the latest leadership contest.

Sunak has the backing of at least 124 Conservative lawmakers, according to unofficial tallies compiled by British news organisations. That's well ahead of the 100 nominations required to qualify.

“There will be integrity, professionalism and accountability at every level of the government I lead and I will work day in and day out to get the job done," Sunak said in a statement.

Johnson battling to win support

Johnson, who has not yet declared if he is running, has public support from about 50 lawmakers so far, while Mordaunt had support from about 23, according to the unofficial tallies.

UK Business Secretary Jacob Rees-Mogg told the BBC on Sunday that he spoke with Johnson and “clearly he's going to stand" after flying back to London Saturday from a vacation in the Dominican Republic.

Mordaunt and Johnson - if he confirms he is running - have until Monday afternoon to garner 100 nominations. If all three meet the threshold, lawmakers will vote to knock out one and then hold an indicative vote on the final two.

The party's 172,000 members would then get to decide between the two finalists in an online vote. The new leader is due to be selected by Friday.

A possible return to power for Johnson, 58, who officially quit only in early September, has deeply divided the Conservatives and alarmed many others. Supporters say he is a vote winner and has enough support from lawmakers, but many critics warn that another Johnson government would be catastrophic for the party and the country.

Deeply unpopular

Northern Ireland minister Steve Baker, a former backer of Johnson and an influential politician within the Conservative Party, warned a Johnson comeback would be a  "guaranteed disaster.'' Baker noted that Johnson still faces an investigation into whether he lied to Parliament while in office about breaking his government's own coronavirus restrictions during parties at Downing Street.

If found guilty, Johnson could be suspended as a lawmaker.

"This isn't the time for Boris and his style,'' Baker told Sky News on Sunday. "What we can't do is have him as prime minister in circumstances where he's bound to implode, taking down the whole government ... and we just can't do that again.''

But Johnson won the backing of several senior Conservatives, including Nadhim Zahawi, another former Treasury chief.

"He was contrite and honest about his mistakes. He'd learned from those mistakes how he could run No 10 and the country better,'' Zahawi said.

Mordaunt's team reaches out to Johnson

Penny Mordaunt's campaign contacted Boris Johnson's team on Sunday morning seeking an agreement to influence the outcome of the contest to become the UK's next prime minister, according to leaked text messages seen by Bloomberg.

A deal between Johnson and Mordaunt would theoretically see one of them pull and out endorse the other in a joint ticket.

A person close to Mordaunt said that she had spoken to Johnson several times over the last few days and had asked Johnson not to stand in the race and back her candidacy. The two teams remained in talks on Sunday and no deal had yet been reached, people familiar with the talks said.

The Telegraph reported that Mordaunt herself had rejected a similar proposal from Johnson to quit the race and back him.

Mordaunt and Johnson are both seeking a way to break the momentum building behind Sunak before the Conservatives announce Monday which candidates have made it onto the ballot.

Sunak has won the public backing of 120 Tory lawmakers while Johnson has 51 and Mordaunt 22, according to a tally by Bloomberg. Candidates need the backing of 100 MPs to make it onto the ballot so the crucial issue over the next 24 hours will be whether either Johnson or Mordaunt can amass enough support to prevent Sunak being declared the winner by default on Monday.

Truss quit Thursday after a turbulent 45 days, conceding that she could not deliver on her botched tax-cutting economic package, which she was forced to abandon after it sparked fury within her party and weeks of turmoil in financial markets.

Sunak, who was Treasury chief from 2020 until this summer, steered Britain's slumping economy through the coronavirus pandemic. He quit in July in protest of Johnson's leadership.

In the summer contest to replace Johnson, Sunak called promises by Truss and other rivals to immediately slash taxes reckless "fairy tales'' and argued that climbing inflation must be controlled first.

Tory voters backed Truss over Sunak, but he was proved right when Truss' unfunded tax-cutting package triggered chaos in the markets in September.

Dozens among Britain's 357 Conservative lawmakers have not yet publicly declared whom they are backing to replace Truss.

UK political turmoil: What you need to know

Following are latest events, comments and context:

Politics

Johnson and his former finance minister Sunak are leading the contenders to be the next prime minister following Liz Truss' resignation after just six weeks in office.

Sunak, whose resignation in July triggered Johnson's removal, vowed to tackle the country's "profound economic crisis" with "integrity, professionalism and accountability".

Truss was brought down by an economic programme that roiled financial markets, pushed up living costs for voters and enraged much of her own party.

Candidates are canvassing support among Conservative Party lawmakers to become party leader - and prime minister - in a fast-tracked contest.

Johnson, who was ousted by his lawmakers in July but remains popular with party members, is aiming to make what would be an extraordinary political comeback.

Former defence minister Penny Mordaunt has also joined the contest to become the country's fifth prime minister in six years.

The leadership election will be completed by Friday to replace Truss, the shortest serving prime minister in British history. The first results will be announced at 1700 GMT on Monday.

A nationwide election need not be called for another two years, but opposition parties said voters should now be given a say. Labour Party leader Keir Starmer said the battle at the top of Conservatives was a "ridiculous, chaotic circus".

Labour leads the government by more than 30 points in some opinion polls.

Economy

British shoppers cut their spending sharply in September while public borrowing grew by more than expected, underscoring the challenge facing new finance minister Jeremy Hunt and whoever succeeds Truss as prime minister.

Hunt reiterated on Friday that the government will do "whatever is necessary" to drive down debt in the medium term.

Markets

Sterling fell on Friday, weighed by the economic and political uncertainty. Analysts reckon that markets will need some time to thoroughly shake off the political risk premium built over recent weeks.

What's behind the crisis?

Britain's financial markets were plunged into turmoil on Sept. 23 after then-new finance minister Kwasi Kwarteng announced billions of pounds of unfunded tax cuts.a

The Bank of England was forced into emergency bond-buying to stem a sharp sell-off in Britain's $2.3 trillion government bond market that threatened to wreak havoc in the pension industry and increase recession risks.

Kwarteng's replacement Jeremy Hunt on Monday scrapped "nearly all" of the economic plan and scaled back Truss's vast energy support scheme, announced in September, in a historic U-turn to try restore investor confidence.

The BoE interventions have highlighted a growing segment of Britain's pensions sector - liability-driven investment.