Rishi Sunak becomes the UK’s first prime minister of color and the first Hindu prime minister, both milestones in Britain’s evolution as a multicultural and multi-faith society.
Former Investment banker and former chancellor of the Exchequer is elected to office and is already making quick changes to his cabinet.
On Tuesday, Rishi Sunak became Britain's third prime minister of the year, entrusted with resolving an economic crisis that has placed the country's finances in jeopardy and millions struggling to pay their food and electricity bills.
Sunak, the United Kingdom's first black leader, met King Charles III at Buckingham Palace, where the monarch, as is customary, publicly invited the new leader of the ruling Conservative Party to form a government.
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After Liz Truss's brief, catastrophic tenure, Sunak was considered by his party as a safe pair of hands to manage an economy on the verge of a recession — and halt its own plummeting popularity.
Her unfunded tax cuts frightened financial markets, pushed the pound to record lows, and compelled the Bank of England to intervene, damaging Britain's economy and obliterating Truss' power within her party.
Sunak indicated that he will keep Treasury Chief Jeremy Hunt, who Truss appointed to calm the markets two weeks ago amid the upheaval.
His elimination would have caused further vibrations. Sunak, the youngest British prime minister in more than 200 years, acknowledged the magnitude of his task, as well as the cynicism of a British public concerned about the status of the economy and tired of a Conservative Party soap opera that has consumed two prime ministers in as many months.
Prime Minister Rishi Sunak soon began picking Cabinet members, hoping to imprint his mark on the administration while bringing in members from other factions of the Conservative Party.
He fired a dozen members of Truss' administration but retained other prominent officials, notably Foreign Secretary James Cleverly as well as Defense Secretary Ben Wallace. Suella Braverman, the Home Secretary who stepped down last week in a move that contributed to Truss' collapse, has been reinstated. Braverman, a Tory right-winger, is tasked with carrying out a contentious, blocked proposal to send certain asylum seekers arriving in the UK on a one-way flight to Rwanda. Sunak also reintroduced figures from Truss' predecessor, Boris Johnson's, period, such as Deputy Prime Minister Dominic Raab and Cabinet veteran Michael Gove.
Sunak intends to build an experienced Cabinet whose competency will erase memory of the previous months' blunders and U-turns. However, the right-of-center party's divides over immigration, European ties, and other major issues remain profound. Allies of Truss and the scandal-plagued Johnson who have been marginalised or removed from the administration can now raise complaints from the back benches of Parliament. Sunak gained public favor while he was Treasury Secretary, paying out billions of dollars in relief to shuttered firms and laid-off people during the COVID-19 epidemic. However, in order to contain inflation and government debt, he will now have to oversee tax increases and public expenditure cuts.
Sunak's riches is mostly derived from his wife Akshata Murty, whose father is the millionaire founder of the Indian IT business Infosys. According to the Sunday Times Rich List, the pair is worth 730 million pounds ($826 million). Murty's failure to pay UK tax on her abroad income was revealed in April 2022. The technique was legal, and Murty quickly agreed to stop, but it looked ugly at a time when millions of Britons were trying to make ends meet. Sunak's triumph comes only weeks after he was defeated by Truss in a Conservative contest to succeed Johnson. Sunak was elected Conservative leader on Monday after becoming the only contender to meet the 100-member nomination requirement.
Sunak beat House of Commons Leader Penny Mordaunt, who will retain her position in his administration, and Johnson, who failed to garner enough support for a return campaign. Sunak must now prepare for Hunt's budget speech on Oct. 31, which will outline how the government intends to raise billions of pounds (dollars) to plug a budgetary shortfall produced by surging inflation and a sluggish economy — and worsened by Truss' disruptive intentions. Truss announced her resignation last week and left Downing Street on Tuesday after delivering a bold public address seven weeks to the day after being named prime minister.
In opinion surveys, she puts the Conservative Party below the left-wing Labour Party. Sunak has no more than two years to turn things around. There is no need for an election until the end of 2024, while popular pressure is mounting to have one sooner. Sunak's objective, according to Jill Rutter of the Institute for Government, is to demonstrate that the Conservatives "are capable of leading in a fair way in the national interest." "If they continue to appear to be a party unable of making decisions, incapable of making those decisions stick," she continued, "they will probably deserve to be punished by the people the next time around."
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This article originally appeared in Sunak takes over as UK prime minister amid economic crisis
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Jeremy Hunt was reappointed as chancellor of the exchequer on Tuesday, as incoming Prime Minister Rishi Sunak assigned him the critical task of laying out a strategy to restore Britain's public finances.
“It is going to be tough,” Hunt said. “But protecting the vulnerable — and people’s jobs, mortgages, and bills — will be at the front of our minds as we work to restore stability, confidence, and long-term growth.”
Sunak and Hunt will spend the next several days developing a promised medium-term fiscal plan, which will include a five-year timetable to reduce the UK's debt. Hunt has been "working hard" to provide the fiscal report on October 31, as anticipated.
Sunak's first cabinet meeting on Wednesday is scheduled to determine the date. The chancellor has been eager to submit the financial statement before the Bank of England's important meeting to decide interest rates on November 3.
Hunt expects that if he can persuade markets and the UK's independent fiscal watchdog, the Office for Budget Responsibility, that he has a realistic strategy to restrict borrowing, the BoE would lower its projected rate hike.
According to government insiders, the date of the statement might be pushed back to November 1 or November 2 to give Sunak and Hunt additional time to finish the economic statement.
In-depth News Recommendation Sunak Rishi As UK Prime Minister, Rishi Sunak faces a demanding workload. The chancellor has finished a first draft of the statement and has already discussed its contents with Sunak and his erstwhile opponents for the leadership.
The Treasury has been operating on the assumption that the UK's budget shortfall is around £40 billion.
Hunt seeks to persuade the OBR's economic forecasters that the real hole in the public finances is much less, thanks in part to the rebound in gilt markets, which lowers the cost of repaying government debt.
Sir Charlie Bean, a former OBR official and the Bank of England's top economist, told the BBC that markets had calmed.
Markets are reducing their predictions on the extent to which the central bank will have to boost interest rates to combat inflation, with a 0.75 percentage point hike in borrowing costs expected at the November 3 monetary policy committee meeting.
At the height of the crisis, markets predicted a rise of up to 1.5 percentage points. The chancellor is proposing a five-year fiscal consolidation plan that would progressively reduce borrowing until debt began to decline as a percentage of GDP in the fifth year, after which it would begin to rise as a share of GDP.
According to those informed on Hunt's strategy, the public expenditure would be squeezed over the next five years, with a particularly harsh settlement envisaged after the next general election.
Former Bank of England governor Lord Mervyn King told the BBC on Sunday, "The difficulty is, if we want European levels of social benefits and public spending, you cannot afford that with American tax rates."
Some in Whitehall stated that Sunak would have preferred to install his buddy Oliver Dowden chancellor, but that he acknowledged Hunt's recent market stabilization and wanted him to continue in office.
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This article originally appeared in Rishi Sunak reappoints Jeremy Hunt as chancellor
Representing the Minority
Hashi Mohamed's reaction to Rishi Sunak's appointment as Prime Minister was curmudgeonly in my opinion. Rishi Sunak became Britain's first Asian prime minister on October 25, but it was far from a progressive win. Sunak did have a privileged childhood, but he worked hard in school and at university and deserves his achievement.
You are not required to agree with his political views. I don't realize that comparable to President Obama's election, something has changed. The dial has been radically, openly, and obviously moved. Thousands of young people must be thinking, with more than just a fantasy in their spirit, "If he can do it, so can I."
That is fantastic, even though I am not so stupid as to believe that nativist xenophobia and racism do not exist, or that structural obstacles such as intergenerational poverty and social hardship will not impede many. The issue for "progressives" now is to rebalance their worldview.
They might begin by acknowledging that race and color do not predict life outcomes and that genuine change is possible. Meanwhile, I congratulate Sunak on being the first person of color and the youngest person in 200 years to hold the highest post in the country.
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This article originally appeared in Rishi Sunak’s arrival as prime minister is a historic moment for us