LONDON — Former finance minister Rishi Sunak made a political comeback on Monday when he was elected prime minister by Britain’s ruling Conservative Party, just seven weeks after he was defeated by Liz Truss.
Sunak, 42, officially became prime minister after a meeting with King Charles at Buckingham Palace on Tuesday, where he received symbolic permission to assume the role in a ceremony known as “kissing hands”.
Sunak is the fifth British prime minister in six years and the third in less than two months. He was Britain’s first leader of South Asian descent, the first Hindu prime minister, and the country’s first leader of colour. He is the youngest prime minister of modern times.
Following Truss in October, he won the party’s election as the country’s new leader. 20 resign. Her tenure was the shortest ever British prime minister and marked by economic turmoil. British voters elect a political party rather than a specific leader, meaning the ruling party can change the prime minister without calling an election. Sunak won the party match after his challenger Penny Mordaunt dropped out.
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UK economic turmoil
He took over as Britain faced unusually tough economic times.
Forecasts suggest its economy has slipped into recession and the country is being hit by some of the highest energy and borrowing costs in Europe, angered by Tesla’s aggressive tax cuts, which spooked bond market investors and sparked concerns from international investors. The IMF believes that this will push up prices further. UK annual inflation hit 10.1% in September, a 40-year high.
Sunak said on Tuesday that Britain was facing a “serious economic crisis”.
He is a former banker who served as Chancellor of the Exchequer – Treasurer in Boris Johnson’s government. He oversaw Johnson’s package of economic support for businesses and employees during the coronavirus pandemic, but resigned this summer, citing a “fundamentally different” economic approach to tackling Britain’s cost of living crisis and government “standards” , referring to Johnson’s gaffe-prone, controversial leadership style that has led to several allegations of wrongdoing.
Johnson dropped out of the race late on Sunday to replace Truss, after days of saying he would make a dramatic return to Downing Street after resigning in July.He ended his nearly three-year scandal-ridden prime ministership as his cabinet resigned over allegations he broke his own coronavirus lockdown rules by hosting a series of social events and over his handling of harassment allegations against the Conservative Party dissident legislator
Who is Rishi Sunak?
Sunak rose to the political scene quickly after a superior upbringing and a lucrative marriage. Sunak is married to the daughter of the co-founder of Infosys, one of India’s largest tech companies. The couple met while studying at Stanford University. They have an estimated fortune of $1 billion, according to the Sunday Times Rich List, an annual measure of the 1,000 richest people and families living in the UK.
Sunak was born and raised in the south of England. His mother was a pharmacist and his father was a doctor. He attended Oxford University and Winchester College, one of the most prestigious preparatory schools in the UK, before earning an MBA from Stanford University.
Sunak often talks about his Indian heritage and being a devout Hindu. He has said that Diwali candles were lit in the finance minister’s office and outside his home when the finance minister was one of the proudest moments of his career. Sunak was appointed prime minister during the Hindu religious festival.
Truss is the fourth British prime minister to resign since the 2016 Brexit referendum. Brexit is an economic and legal divorce that has sparked unprecedented political division and chaos in a country often revered as a model of stable and reliable governance. The Bank of England was forced to buy government bonds known as “gilts” after Truss unveiled a series of aggressive tax cuts just days after taking office. The pound currency plummeted.
With Sunak occupying No. 10 Downing Street, London’s economic and diplomatic relations with Washington are unlikely to suffer any significant impact. There is broad consensus on all of today’s major national security issues, from supporting Ukraine when Russia went to war in Ukraine to countering China’s global rise.
Sunak was less vocal than Truss on the issue of the Northern Ireland Protocol, agreed with the EU to deal with the border between Ireland (part of the EU) and Northern Ireland (part of the UK) question.
US lawmakers have expressed concern that failure to comply with the agreement could threaten the fragile peace in Northern Ireland.
Multiple opinion polls show that a majority of Britons, especially young people, would prefer to join the EU if given a choice. However, there was little interest in the new vote.
Sunak will have to make tough tax and spending decisions in his first days and weeks in office as he tries to stabilize Britain’s struggling economy.
Sunak overcame the challenge of Penny Mordout, a former defence and trade secretary under Johnson, whom Truss appointed leader of the House of Commons. Mordaunt is a big supporter of Brexit. She withdrew from the game on Monday.
What is Rishi Sunak’s economic plan?
- During Sunak’s previous attempts to become prime minister, he warned that Trus’ plans to cut taxes and borrow money during an inflationary crisis would lead to financial chaos. That’s exactly what Truss did, and what happened.
- In a brief statement at the Conservative Party’s London headquarters on Monday, Sunak warned that Britain faced “profound” economic challenges. Sunak reiterated the message in a speech outside Downing Street on Tuesday, saying the country was in an economic “crisis” and that as prime minister he would work around the clock to right some of Truss’ mistakes.
- Still, Sunak did not specify how he intends to address Britain’s economic woes. But markets see him as a relatively safe hand during his tenure as finance minister, with restoring Britain’s economic credibility and calming volatile markets in some respects his priorities. Britain’s FTSE 100 benchmark rose after announcing that Sunak would become prime minister. The pound also appreciated against the dollar and euro currencies.
- Britain’s new leader has yet to say whether he will retain current finance minister Jeremy Hunt, who was appointed by Truss as part of a last-ditch effort to save her as prime minister. However, Hunter will unveil the UK’s new economic plan on October 1. 31. Hunter has already hinted that this will involve the pain of cutting government spending.
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