Rishi Sunak will become British prime minister on Monday after other candidates quit the race to lead the Conservative Party, leaving him with the task of steering a deeply divided country through an economic downturn set to leave millions of people poorer.
He defeated centrist politician Penny Mordaunt, who failed to get enough backing from lawmakers to enter the ballot, while his rival, the former prime minister Boris Johnson, withdrew from the contest saying he could no longer unite the party.
“This decision is an historic one and shows, once again, the diversity and talent of our party. Rishi has my full support,” Mordaunt said in a statement as she withdrew from the race just minutes before the winner was due to be announced.
The pound and British government bond prices jumped briefly on news of Mordaunt’s withdrawal, but soon returned to their previous levels.
Sunak, the 42-year-old former finance minister, becomes Britain’s third prime minister in less than two months, tasked with restoring stability to a country reeling from years of political and economic turmoil.
The multi-millionaire former hedge fund boss would be expected to launch deep spending cuts to try to rebuild Britain’s fiscal reputation, just as the country slides into a recession, dragged down by the surging cost of energy and food.
Britain has been locked in a state of perma-crisis ever since it voted in 2016 to leave the European Union, unleashing a battle at Westminster over the future of the country that remains unresolved to this today. The latest bout of drama has drawn dismay in foreign capitals and ridicule from the world’s press.
The former Goldman Sachs analyst came to national attention when, at age 39, he became finance minister under Johnson just as the Covid-19 pandemic hit Britain, developing the successful furlough scheme.
He will be the United Kingdom’s first prime minister of Indian origin, almost 75 years after the UK walked out of India, leaving behind a country divided by sectarian violence and marked by almost two centuries of colonization. Sunak plays down his own origins and, like other conservatives whose families once left the Indian subcontinent, such as Sajid Javid, Priti Patel or Suella Braverman, he prefers to let his ideas and actions prevail. But it is a powerful image all the same.
In any event, Sunak will not have much time for celebrations. The markets remain concerned about the drift of the British economy. After the formalities are over - Liz Truss formally tendering her resignation to Charles III, and the monarch commissioning the new Conservative leader to form a government - the first major test for the new executive will take place on October 31.
That is the day when Chancellor Jeremy Hunt is due to present a plan containing tax and spending measures aimed at showing Downing Street’s willingness to straighten out the country’s finances. Despite maintaining public neutrality in recent days as the battle for party leadership raged on, Hunt on Monday showed open support for Sunak. Everything suggests that he will remain in office, having managed to regain investor confidence by completely reversing the Truss tax cuts.
The task ahead is tough. Some taxes may have to go up, and further cuts in public spending may be necessary. Sunak must decide whether to raise pensions or social benefits at the same rate as inflation, which currently stands at 10.1%, as many of his own deputies are calling for, or to moderate this hike to protect the public coffers.