After a whirlwind few weeks in the government, Rishi Sunak emerged the victor in the race to become the UK’s next Prime Minister. He is Britain’s youngest PM in modern times and the country’s first non-white leader after the Conservative party overwhelmingly backed his bid to succeed Liz Truss.
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His opponents cleared the way toward the highest office in the land after former PM Boris Johnson backed out over the weekend and his final obstacle, Penny Mordaunt, pulled out of the race just before the deadline for nominations on Monday, urging the Torys to unite behind Sunak.
Despite winning the majority of the party over, Sunak remains a divisive figure amongst conservatives. When he served with Boris Johnson, many accused him of undermining the previous prime minister when he quit his position of Chancellor of the Exchequer this summer.
What’s on the new PM’s agenda?
Just as his short-lived predecessor, Sunak faces a whole host of issues to tackle. On his agenda will be a public finance crisis, high inflation, over-exerted public services, industrial unrest, sky-rocketing energy bills, and more. His to-do list is overflowing.
Sunak’s priority as a fiscal conservative will be to repair the economy. As part of his speech this past weekend, he promised ‘integrity, professionalism and accountability at every level of the government.’ He will need to unite his party, which has been incredibly divided under Truss’ previous leadership, with one of his first tasks being assembling a new cabinet.
Before his resignation as CoE under Johnson, Sunak’s plan to revive the economy included tax raises meant to restore public services depleted by the coronavirus pandemic. Recently appointed chancellor, Jeremy Hunt, is expected to keep his position under Sunak.
Market response
The initial response to the news of Sunak’s appointment has been positive. The markets bounced back a bit after the turmoil former PM, Liz Truss, and former Chancellor of the Exchequer, Kwasi Kwarteng, caused with their unfunded tax-cutting plan.
Following the announcement of Sunak stepping into power, gilts and sterling rallied, with many investors assuming Sunak will stick with Hunt’s fiscal policies.
Despite Labour’s push to call a general election after Truss’ disastrous policies and their assertion that Sunak hasn’t actually announced his plans to run the country, it is highly unlikely one will be called any time soon.
To discuss how the new leadership will impact your finances, be sure to make contact with your trusted adviser for a financial review.