Conservative leader Rishi Sunak is set to become the next British Prime Minister, replacing Liz Truss amid a major financial crisis in the U.K.
Sunak, 42, a former Chancellor and Treasury, became the leading Conservative candidate after Penny Mordaunt, his only competitor, dropped out of the race Monday. Truss’ predecessor, Boris Johnson, who was in the race to replace her, pulled out Sunday.
Sunak’s term, however, is contingent on Truss handing her formal resignation to King Charles. She stepped down last week after just 44 days in office, becoming the shortest-serving PM.
Truss was forced to resign after her fiscal policies worsened the impact of inflation and sank the pound further. Her tenure also saw stock markets shake, with even a rare Bank of England intervention failing to quell the frenzy.
Sunak, a Stanford and Oxford graduate would be the first person of Indian-origin to become PM, steered the U.K. economy through the COVID-19 pandemic with a “new age of optimism” and a focus on recovery spending.
.”The lights on the economy are flashing red, and the root cause is inflation. I’m worried that Liz Truss’s plans will make the situation worse,” he said during his earlier campaign against Truss.
Sunak, whose fiscal conservatism some say cost him the earlier race, could pave the way for the British economy out of the storm. Once he is sworn into office, Sunak could preside over budget cuts aimed at repairing the fallout from Truss’ policies.
As chancellor, he raised taxes as a share of national income to their highest in nearly 70 years. He also introduced a windfall tax on oil and gas companies over the summer as the U.K. battled mounting living costs.
However, Sunak’s path to the top post in the U.K. government has not been without hurdles. Earlier this year, his wife, Akshata Murthy, was involved in a tax scandal, casting doubts over Sunak’s political legitimacy and chances.
Sterling dropped to $1.1284 against the dollar shortly after the announcement of Sunak’s win.