Rishi Sunak has been named the new leader of the Conservative Party after other candidates quit.
The former Chancellor of the Exchequer will become Britain’s third prime minister in seven weeks, and the first prime minister from a British Asian background in history, after Sunak meets with King Charles III later this week.
Sunak will succeed Liz Truss, who handed in her resignation last week after her cabinet, and her controversial 45 billion pounds tax-cutting mini-budget drew huge criticism from the financial sector.
Graham Brady, chairman of the 1922 Committee, confirmed at 2 p.m. London time that Sunak was the only person with the backing of more than 100 members of the parliament.
His rival, former British Prime Minister Boris Johnson dropped out of the Tory leadership race Sunday night. Sunak’s other rival Penny Mordaunt withdrew from the contest two minutes before the deadline of the leadership race nomination deadline.
Speaking to BBC after the announcement, Britain’s Foreign Secretary James Cleverly, who had originally backed Johnson to be leader, said, “I think what we have all wanted is for the government to be relentlessly focused on the domestic and the international issues that confront us all. Stability, focus on good government. These are absolutely the right things. And now that we know we have got some certainty, I think it’s a very positive move. I think even another week’s worth of delay would have been counterproductive.
“Sunak was the candidate with the most experience. He’s smart and talented, and I have no doubt that he will build a team that focuses on what we should always be focused on, which is the British people,” Cleverly added.
Later in the afternoon, Sunak gave his first speech as the new Conservative Party leader.
After paying tribute to his predecessor Truss, he said that “The United Kingdom is a great country, but there is no doubt we face a profound economic challenge. We now need stability and unity and I will make it my utmost priority to bring our party and our country together.”
The pound continued to rally before the Tory leadership race was announced, as the market was bullish that Sunak was set to become the next prime minister. The value of sterling climbed as high as $1.1401 against the U.S. dollar in early Asia trading.
Josh Mahoney, an analyst at the online trading provider IG Group noted that “Sunak’s successful bid to become the new Prime Minister has spared markets any additional uncertainty today.”
He pointed out that the gilt markets have responded positively, down 28 basis points at 3.78 percent, “bringing hope that we will see borrowing costs continue to ease after a turbulent Truss tenure.”
“The hope for many is that tighter central bank and government policies will swiftly drive down inflation without hurting the economy too much. However, traders will remain concerned that the economic fallout is more damaging than expected, and inflation keeps rates higher for longer,” Mahoney added.
The Financial Times Stock Exchange 100 Index, a key indicator of the performance of the London Stock Exchange, rose 0.64 percent on Monday, closing at 7,022.
Dave Ramsden, deputy governor at the Bank of England, said the U.K. is regaining its credibility after the political chaos is coming to an end.
“Credibility is hard won and easily lost. That credibility is being recovered. That has to be followed through. A return to the kind of stability around policy making and around the framing of fiscal events will be really important,” he said in Parliament today.