Rishi Sunak becomes Britain’s 3rd leader in 2 months, inheriting a host of challenges

LONDON —  Rishi Sunak became Britain’s third prime minister in two months Tuesday, tasked with taming an economic crisis that has left the country’s finances in a precarious state and millions of Britons struggling to afford food and energy bills.

Sunak, the U.K.’s first leader of color, met with King Charles III at Buckingham Palace, where the new monarch officially asked the leader of the country’s governing party to form a government, as is tradition. Sunak clinched the leadership of the Conservative Party on Monday, seen by his colleagues as someone who can stabilize an economy sliding toward recession and stem the party’s own plunging popularity after the brief, disastrous term of Liz Truss.

Her package of unfunded tax cuts spooked financial markets with the prospect of ballooning debt, drove the pound to record lows and forced the Bank of England to intervene — weakening Britain’s fragile economy and obliterating her authority within her party.

Sunak — at 42 the youngest British leader in more than 200 years — acknowledged the scale of his challenge as well as the skepticism of a British public alarmed at the state of the economy and weary of a Conservative Party soap opera that has chewed through two prime ministers in as many months.

“I fully appreciate how hard things are,” Sunak said outside the prime minister’s 10 Downing St. residence. “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.”

Sunak immediately set about filling the posts in his administration, aiming to put his stamp on the government while bringing in people from different wings of the Conservative Party. His first move was to remove about a dozen members of Truss’ Cabinet.

World & Nation

With another prime minister gone, what’s next for an already diminished Britain?

Out-of-control inflation. Weak currency. An energy crisis. The resignation of yet another prime minister caps off a tumultuous time in Britain.

Oct. 20, 2022

He aims to assemble a Cabinet whose competence can erase memories of the missteps and U-turns of the last several months. But the Conservative Party’s divisions over immigration, relations with Europe and other big issues remain deep. Allies of Truss and her scandal-plagued predecessor, Boris Johnson, who have been demoted from government can now nurture grievances from Parliament’s back benches.

When he was Treasury chief, Sunak became popular with the public by handing out billions in support to shuttered businesses and laid-off workers during the COVID-19 pandemic.

But now he will have to oversee tax hikes and public spending cuts as he tries to bring inflation and government debt under control.

Acknowledging “difficult decisions to come,” Sunak tried to draw a line under the chaos that engulfed Truss and Johnson. He said his government would “have integrity, professionalism and accountability at every level.”

World & Nation

U.K. leader Liz Truss goes from triumph to trouble in 6 weeks

British Prime Minister Liz Truss has only been in office for six weeks, but her libertarian economic policies have triggered a financial crisis.

Oct. 16, 2022

Opponents already depict Sunak as out of touch with the concerns of ordinary people because of his privileged private-school background, previous career as a hedge fund manager and vast wealth.

Sunak “comes into office as not a particularly popular prime minister, but with a reputation for some semblance of economic competence,” said Alan Wager, research associate at the think tank U.K. in a Changing Europe. “The problem will be he is seen as someone that’s not broadly on the side of people. He’s seen as someone that’s broadly out of touch.”

Much of Sunak’s fortune comes through his wife, Akshata Murty, whose father is the billionaire founder of Indian IT firm Infosys. The couple is worth about $826 million, according to the Sunday Times Rich List.

In April, it emerged that Murty did not pay British tax on her overseas income. The practice was legal, but Murty soon agreed to halt it, and it looked bad at a time when millions of Britons were struggling to make ends meet.

World & Nation

In striking U-turn, Britain scraps tax cut for wealthy that helped spark market turmoil

The British government has dropped plans to cut income tax for top earners after defending the proposal for days.

Oct. 3, 2022

In addition to assembling a Cabinet, Sunak has to prepare for a budget statement that will set out how the government plans to come up with billions of pounds to fill a fiscal hole created by soaring inflation and a sluggish economy and exacerbated by Truss’ missteps.

The statement, set to feature tax increases and spending cuts, is currently due to be made in Parliament on Monday by Treasury chief Jeremy Hunt — if Sunak keeps him in the job.

Truss departed Tuesday after making a defiant public statement outside 10 Downing St., seven weeks to the day after she was appointed prime minister. She had announced her resignation on Thursday, acknowledging that she could not deliver on her economic plans.

In her departing words, Truss offered a defense of her low-tax economic vision and her brief term in office — despite the market mayhem triggered by her Sept. 23 budget package.

“I am more convinced than ever that we need to be bold and confront the problems we face,” she said, before wishing Sunak success as “our country continues to battle through a storm.”

Sunak’s ascension is a remarkable reversal of fortune just weeks after he lost to Truss in a Conservative election to replace former Prime Minister Boris Johnson. Party members chose her tax-cutting boosterism over his warnings that inflation must be tamed.

Sunak was chosen as Conservative leader Monday after becoming the only candidate to clear the hurdle of 100 nominations from fellow lawmakers to run in the party election. Sunak saw off challenges from rival Penny Mordaunt, who may get a job in his administration, and the ousted Johnson, who dashed back from a Caribbean vacation to try to rally support for a comeback bid.

Conservative lawmaker Victoria Atkins, a Sunak ally, said the party would “settle down” under his leadership.

“We all understand that we’ve now really got to get behind Rishi — and, in fairness, that’s exactly what the party has done,” she told radio station LBC.