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New U.K. PM Rishi Sunak warns of ‘profound economic challenge’ in First Speech

Rishi Sunak has warned that the UK faces a “profound economic challenge” as it prepares to take power after emerging victorious in the race to succeed Liz Truss as Prime Minister.

In a brief speech just hours after Penny Mordaunt withdrew from the race for No. 10 Downing St, the former chancellor of the exchequer, 42, vowed to make it his “top priority” to unite the nation and his embattled Tory party. . “I will work day in and day out to deliver for the British people,” he said.

Sunak faces the huge challenge of stabilizing the UK economy in the face of headwinds, including double-digit inflation, rising interest rates and rising mortgage costs. After leaving the Tories languishing in the polls after a disastrous 7 weeks in power, Truss also has the difficult task of uniting the various Tory factions, with many of the party’s MPs blaming him for the downfall of Truss’s predecessor Boris Johnson earlier in the year.

Sunak earlier told Tory MPs that their party faced an “existential threat”, according to Simon Hoare, a Tory lawmaker present at his closed-door address. His call for unity echoed Mordaunt’s words in her concession shortly before 2pm. local time. She called on the Tories to “unite and work together for the good of the nation”.

By dropping out, Mordaunt ensured there would be no need for a second round of voting among local party members, which was not scheduled until Friday. The handover of power to Sunak from Truss is now likely to take place as early as Tuesday, although Prime Minister’s spokesman Max Blain was unable to confirm the timing, saying it would be resolved later on Monday. However, he told reporters that it would not take place on Monday.

It is a remarkable turnaround in Sunak’s political fortunes after the former Chancellor of the Exchequer left Boris Johnson’s government in July and then lost to Truss in the last Tory leadership battle in the summer. But his repeated warnings that her plans would cause economic chaos proved correct, putting him in pole position as Truss’s premiership imploded.

Even so, Sunak was no slouch given the bitterness and division in the Conservative Party. He is still tarnished in the eyes of many Tory MPs for his role in Johnson’s downfall, and the former prime minister’s weekend flirtation with what would be an outrageous comeback just months after he was briefly ousted threatened to derail Sunak’s hopes.

In the end, Johnson withdrew without ever showing that he had the support of the 100 Tory MPs needed to formally challenge the leadership. Similarly, Mordaunt withdrew shortly before the influential Tory MP Graham Brady was due to announce which candidates had crossed the line.

In effect, it marked a coronation for Sunak, 42, who became the UK’s first Hindu Prime Minister and the country’s youngest in more than 200 years. Grassroots Tory members, who had the final say when Truss defeated Sunak last time, will have no input this time.

But Sunak now faces the daunting task of trying to bring that unity to a party that has endured months of upheaval and is still fractured over major issues including Brexit and the economy. The party is trailing badly in opinion polls and must call an election by January 2025 at the latest.

But some Tory MPs said the party no longer had the mandate to govern, following the second change of leader since Johnson won the general election in 2019. “There will be no avoiding GE now,” former culture secretary Nadine Dorries said earlier. on Twitter. But Sunak told his MPs that there would be no snap election, according to Hoare.

There were signs on Monday that Tory MPs are ready to stand up for their new leader. After Sunak’s speech, former Tory leader Iain Duncan Smith – the party’s ideological right-wing Brexiteer – told reporters: “It’s time to end this psychodrama.” And Alex Chalk, a leftist from the moderate One Nation party, hailed Sunak’s “incredible speech”.

“We have to move forward,” Chalk said. “He said it with an articulation and power that brought the room to life.

Truss’s decision to step down followed weeks of turmoil as investors dumped UK assets. Her economic plan, including borrowing to pay for massive tax cuts, rattled markets and turned voters against the Tories in record numbers.

After sacking her first finance minister and longtime political ally Kwasi Kwarteng, Truss brought in Jeremy Hunt – who backed Sunak on Sunday – to try to restore calm.

Hunt has succeeded to some extent, but he has also steered the government into introducing another punishing round of austerity measures at a politically sensitive time when Britons are struggling with soaring living costs.

In a column for the Telegraph newspaper late Sunday, Hunt said he and Sunak agreed on how to tackle the economy. Sunak will “turn the page on what went wrong, make decisions in the national interest and restore the extraordinary potential of our economy,” Hunt said.

Hunt is due to release a major statement on the Treasury’s tax and spending plans on October 31, a date chosen to better inform the Bank of England about how quickly it should raise interest rates. UK bonds rose at the open on Monday on expectations of Prime Minister Sunaku.

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