Sunak pledges to fix Truss’ ‘mistakes’ after becoming third UK PM in seven weeks

 

As Britain's third prime minister in two months, Rishi Sunak declared on Tuesday that he was unfazed by the scope of the challenge and promised to restore confidence and lead the nation through an economic crisis.

The task at hand for the 42-year-old former hedge fund manager, who has only been in elected politics for seven years, is to put an end to the squabbling and infighting at Westminster that has horrified investors and alarmed international allies

He disregarded the custom of standing with his family and supporters outside the prime minister's residence at Downing Street and instead said, "I fully appreciate how hard things are.

"After everything that has happened, I am aware that I still have work to do to earn back people's trust. I can only say that I am not intimidated. I am aware of the high office I have taken, and I intend to fulfill its requirements."

A 40 billion pound ($45 billion) hole in the public finances is expected to be filled by Sunak, one of the wealthiest members of parliament, by cutting spending. This hole was caused by the slowdown in the economy, higher borrowing costs, and a six-month program to help people with their energy bills.

If Sunak deviates too much from the policy platform that helped the Conservative Party win the general election in 2019, when Boris Johnson promised to make significant investments in the nation, his party's popularity is in free fall, and there are growing calls for an election.

Though they caution that Sunak has few simple options when millions of people are struggling with a cost of living crisis, economists and investors have predicted that his appointment will calm markets.

Shortly after accepting King Charles's request to form a government, he declared that "I will place economic stability and confidence at the heart of this government's agenda." There will be challenging choices to make as a result.

Additionally, he vowed to put the needs of the public ahead of politics, reflecting the growing rage at the sense of perpetual crisis that has overtaken Britain ever since the historic 2016 vote to leave the European Union sparked a conflict over the nation's future.

Sunak has warned his colleagues that if they do not work to guide the nation through the soaring inflation and record energy costs that are forcing many households and businesses to cut back on spending, they will face a "existential crisis."

FINANCIAL TURMOIL

As the country's first prime minister of color and the youngest prime minister in more than 200 years, he succeeded Liz Truss, who resigned after 44 days as a result of a "mini budget" that caused havoc on the financial markets.

Now he must examine every expenditure, including those in politically touchy areas like welfare, education, defense, and the payment of pensions and health care.

Politicians, journalists, and photographers swarmed into Downing Street on Tuesday to hear speeches from Truss as he left office and Sunak as he arrived, reflecting the near-constant state of unrest in British politics this year.

Seven weeks to the day after taking office, politicians cheered Truss as she arrived outside her office and home to speak.

Despite the fact that her brief tenure caused the pound to collapse and increased borrowing costs and mortgage rates, she made no apologies for it.

Sunak praised Truss and said that while her plan to rekindle economic growth had not been flawed, mistakes had been made. And part of the reason I was chosen to lead my party and serve as your prime minister, he continued, was to fix them.

Now that Sunak will begin assembling his cabinet, some Conservative legislators are hoping he will include representatives from all factions of the party.

After the former foreign and health secretary helped calm volatile bond markets by tearing up the majority of Truss's economic program, he is expected to keep Jeremy Hunt as finance minister.

Investors will also be interested in learning if Sunak still intends to release a new budget along with borrowing and growth projections on October 31. This information would be useful in guiding the Bank of England's interest rate decision on November 3.

Michael O'Leary, the CEO of the airline Ryanair, declared that "adults have taken control again."

POLITICAL MACHINATIONS

Goldman Sachs analyst Sunak, who just joined parliament in 2015, knows that as the economy slips into recession, voters' ire over the antics at Westminster is growing. He therefore needs to bring his party together.

When he resigned as finance minister in the summer, sparking a larger uprising that led to Johnson's downfall, he was held responsible by many in the party.

While many people were relieved that the party chose a new leader so quickly, others questioned whether people from struggling families could relate to or ever vote for a multimillionaire.

According to a Conservative lawmaker quoted by Reuters, "I think this decision sinks us as a party for the next election."

Sunak would be limited by the errors of his predecessor, political historian and biographer Anthony Seldon told Reuters.

There is no room for him to be anything other than extremely cautious and conservative, he said.

After witnessing how a nation that was once regarded as a pillar of economic and political stability descended into ruthless internal strife, many politicians and officials from abroad welcomed Sunak's appointment.

As the first Indian-born prime minister of Britain, Sunak is a Hindu.

President of the United States Joe Biden called it a "groundbreaking milestone," and leaders from India and other countries applauded the development. N.R. Narayana Murthy, Sunak's billionaire father-in-law, predicted that he would do well for the UK.

The founder of the large software company Infosys issued a statement saying, "We are proud of him and we wish him success."

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