King Charles III
King Charles III welcomes Rishi Sunak at Buckingham Palace, London, where he invited the newly elected leader of the Conservative Party to become Prime Minister and form a new government, on Tuesday, October 25, 2022. Image Credit: AP

London: Rishi Sunak said on Tuesday he was not daunted by the scale of the challenge as he became Britain's third prime minister in two months, pledging to lead the country through an economic crisis and rebuild trust in politics.

The 42-year-old former hedge fund boss, who has only been in elected politics for seven years, has been tasked with bringing an end to the political infighting and radical changes in policy that have horrified investors and alarmed international allies.

In his first order of business, Sunak retained Jeremy Hunt as chancellor of the exchequer, bidding to keep financial markets on side after Truss's budget plans shocked investors.

SUNAK UNVEILS TOP TEAM
Sunak on Tuesday appointed key ministers to his government after replacing Liz Truss as leader earlier in the day. Below are the main cabinet and ministerial appointments:



Finance minister - Jeremy Hunt (re-appointed)

Foreign Secretary - James Cleverly (re-appointed)

House of Commons Leader - Penny Mordaunt (re-appointed)

Interior minister - Suella Braverman

Deputy Prime Minister - Dominic Raab

Defence Secretary - Ben Wallace (re-appointed)

Justice Secretary - Dominic Raab

Education Secretary - Gillian Keegan

Chancellor of the Duchy of Lancaster - Oliver Dowden

COP 26 President - Alok Sharma (re-appointed)

Business, Energy and Industrial Strategy Secretary - Grant Shapps

Minister without portfolio and Conseravtive Party Chairman - Nadhim Zahawi

Chief whip - Simon Hart

Minister for Equalities - Kemi Badenoch

Secretary for International Trade - Kemi Badenoch (re-appointed)

Levelling Up, Housing and Communities Secretary - Michael Gove

Secretary for Digital, Culture, Media and Sport - Michelle Donelan (re-appointed)

Environment Secretary - Therese Coffey

Secretary for Health - Steve Barclay

Northern Ireland Secretary - Chris Heaton-Harris (re-appointed)

Secretary of State for Wales - David Davies

Secretary of State for Scotland - Alister Jack (re-appointed)

Secretary for Work and Pensions - Mel Stride

He warned that difficult decisions lay ahead as he looks to cut public spending and fix the "mistakes" that were made by Liz Truss during her short and chaotic tenure in Downing Street, just as the country slides into a recession.

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With his party's popularity in freefall, he will face growing calls for an election if he ditches too many of the promises that helped elect the Conservative Party in 2019, when then leader Boris Johnson pledged to invest heavily.

Sunak also vowed to put the public's need above politics, in recognition of the growing anger at Britain's political class and the ideological battles that have raged ever since the historic 2016 vote to leave the European Union.

Sunak pledges to restore stability
Britain's new prime minister says "mistakes were made" by his predecessor, and has promised to place "economic stability and confidence" at the heart of his agenda.

Below are the highlights from Sunak's first speech as prime minister outside his No. 10 Downing Street office:

ON THE ECONOMY

"Our country is facing a profound economic crisis. The aftermath of COVID still lingers. Putin's war in Ukraine has destabilised energy markets and supply chains the world over." "I will place economic stability and confidence at the heart of this government's agenda. This will mean difficult decisions to come."

MISTAKES WERE MADE

"I want to pay tribute to my predecessor Liz Truss. She was not wrong to want to improve growth in this country. It is a noble aim. And I admired her restlessness to create change.
"But some mistakes were made " not born of ill will, or bad intentions. Quite the opposite, in fact. But mistakes, nonetheless. And I have been elected as leader of my party and your prime minister, in part to fix them."

ON BORIS JOHNSON

"I will always be grateful to Boris Johnson for his incredible achievements as prime minister and I treasure his warmth and generosity of spirit. And I know he would agree that the mandate my party earned in 2019 is not the sole property of any one individual. It is a mandate that belongs to and unites all of us. And the heart of that mandate is our manifesto. I will deliver on its promise. "

ON THE CHALLENGE AHEAD

"I fully appreciate how hard things are. And I understand too that I have work to do to restore trust, after all that has happened. All I can say is that I am not daunted. I know the high office I have accepted and I hope to live up to its demands."
Rishi Sunak
Britain's new Prime Minister Rishi Sunak delivers a speech outside Number 10 Downing Street, in London, on October 25, 2022. Image Credit: REUTERS

Sunak faces huge challenge to rebuild stability

Rishi Sunak became Britain's third prime minister in two months on Tuesday, tasked with tackling a mounting economic crisis, a warring political party and a deeply divided country in one of the greatest challenges to confront any new leader.

The 42-year-old former hedge fund boss was asked to form a government by King Charles, and will seek to bring an end to the infighting and feuding at Westminster that has horrified investors and alarmed international allies.

He will address the nation from Downing Street and then start building his cabinet of senior ministers.

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Sunak, one of the richest men in parliament, will have to find deep spending cuts to plug an estimated 40 billion pound ($45 billion) hole in the public finances due to an economic slowdown, higher borrowing costs and a six-month programme of support for people's energy bills.

With his party's popularity in freefall, Sunak will also face growing calls for an election if he moves too far from the policy manifesto that elected the Conservative Party in 2019, when then leader Boris Johnson pledged to invest heavily in the country.

Economists and investors have said Sunak's appointment will calm markets, but they warn that he has few easy options when millions are battling a cost of living crunch.

"With a recession in 2023 now increasingly likely, and the next general election in only two years' time, Rishi Sunak can expect a challenging premiership," Eiko Sievert at the Scope ratings agency told Reuters.

Sunak has warned his colleagues they face an "existential crisis" if they do not help to steer the country through the surging inflation and record energy bills that are forcing many households and businesses to cut back spending.

"We now need stability and unity, and I will make it my utmost priority to bring our party and our country together," he said as he was elected by his lawmakers on Monday.

Financial turmoil

Sunak, Britain's youngest prime minister for more than 200 years and its first leader of colour, replaced Liz Truss who resigned after 44 days following a "mini budget" that sparked turmoil in financial markets.

With debt interest costs rising and the outlook for the economy deteriorating, he will now need to review all spending, including on politically sensitive areas such as health, education, defence, welfare and pensions.

Reflecting the near constant state of turmoil in British politics this year, politicians, journalists and photographers once again crammed into Downing Street on Tuesday to hear a departing speech from Truss.

Speaking seven weeks to the day after she arrived as prime minister, Truss did not apologise for her short tenure and said she knew Britain was set for brighter days.

During her time in office the pound hit a record low against the dollar, borrowing costs and mortgage rates surged, and the Bank of England was forced to intervene to protect pension funds from collapsing.

Sunak will now start forming his cabinet, with some Conservative lawmakers hoping he will include politicians from all wings of the party.

He is expected to retain Jeremy Hunt as finance minister after the former foreign and health secretary helped calm volatile bond markets by ripping up most of Truss's economic programme.

Investors will also want to know if Sunak still plans to publish a new budget alongside borrowing and growth forecasts on Oct. 31, which would help inform the Bank of England's interest rate decision on Nov. 3.

Political machinations

Sunak, a Goldman Sachs analyst who only entered parliament in 2015, must unite his party, aware that voters are increasingly angry over the antics at Westminster as the economy heads for recession.

He was blamed by many in the party when he quit as finance minister in the summer, triggering a wider rebellion that brought down Johnson.

While many expressed relief that the party settled on a new leader quickly, a sense of distrust remains among some while others questioned whether struggling families would relate, or ever vote, for a multimillionaire.

"I think this decision sinks us as a party for the next election," one Conservative lawmaker told Reuters on condition of anonymity.

Historian and political biographer Anthony Seldon told Reuters that Sunak would also be constrained by the mistakes of his predecessor.

"There is no leeway on him being anything other than extraordinarily conservative and cautious," he said.

Many politicians and officials abroad, having watched as a country once seen as a pillar of economic and political stability descended into brutal infighting, welcomed Sunak's appointment.

Sunak, a Hindu, also becomes Britain's first prime minister of Indian origin.

US President Joe Biden described it as a "groundbreaking milestone", while leaders from India and elsewhere welcomed the news. Sunak's billionaire father-in-law, N R Narayana Murthy, said he would serve the United Kingdom well.

"We are proud of him and we wish him success," the founder of software giant Infosys said in a statement.