© Stocksak. Rishi Sunak, the new leader in Britain’s Conservative Party, poses outside the Conservative Campaign Headquarters in London on October 24, 2022. REUTERS/Hannah McKay
By Kate Holton, Elizabeth Piper
LONDON (Stocksak), Rishi will have to confront one of the most difficult challenges of any new leader when it comes to becoming British prime minister. He will have to deal with a growing economic crisis and a warring political party as well as a deeply divided country.
After infighting and feuding at Westminster, the 42-year-old former finance Minister becomes Britain’s third prime minster in less than two weeks. This is after investors were horrified and international allies were alarmed by the infighting and feuding.
The former hedge fund boss and one the richest politicians in parliament will now need to find deep spending reductions to plug a 40Billion Pound ($45B) hole in public finances. This comes at a moment when his party’s standing within the country has declined.
On Monday, he warned his Conservative colleagues about an “existential crises” if they didn’t help steer the country through what was described as a “profound financial challenge”.
He said, “We now have to be stable and united, and I will make sure it my utmost priority for our party and our nation to come together.”
Sunak, Britain’s youngest prime minister in more than 200 years, and its first leader of color, will replace Liz Truss. She resigned 44 days after a “minibudget” that caused financial market turmoil.
With rising debt interest costs and a worsening economy, he will have to review all spending including those in politically sensitive areas such education, defense, welfare, pensions, and health.
After being appointed at Buckingham Palace by King Charles, his first task will be to choose a cabinet consisting of senior ministers. Conservative lawmakers hope this will include politicians representing all wings of the party.
After Truss’s economic programme was ripped up, Jeremy Hunt is expected to remain as finance minister. This helped calm volatile bond markets.
Investors will also want information on whether Sunak will publish a new budget on Oct. 31 along with borrowing and growth projections. This would inform the Bank of England’s next rate decision on Nov. 3.
Sunak, a Goldman Sachs Analyst (NYSE:) who has only entered parliament in 2015 will also need to unite the party. This is because voters are becoming increasingly angry at politicians at Westminster as the economy heads into recession, fueled by rising energy prices.
Many party members blamed Sunak when he quit his position as finance minister in the summer. This triggered a larger rebellion that brought down the then leader Boris Johnson.
Although many were relieved that the party had chosen a leader quickly, some still felt distrustful. Others wondered if struggling families would be able or willing to vote for a multimillionaire.
Stocksak was informed by a Conservative lawmaker, who spoke on condition of anonymity that “I think it sinks us as parties for the next election.”
Anthony Seldon, historian and political biographer, told Stocksak that Sunak was the British leader with the most difficult economic or political legacy since World War Two. He would be limited by the mistakes made by his predecessor.
He stated, “There is no way he can be anything other than extraordinarily cautious and conservative.”
Many welcomed Sunak’s appointment to the post as a fresh start after foreign officials and politicians watched in horror as a country once considered a pillar for economic and political stability began a bout with brutal infighting.
His appointment marks a first for Britain, as Sunak, a Hindu convert, becomes the country’s first prime minister.
U.S. President Joe Biden called the appointment a “groundbreaking milestone”, while Indian leaders and others welcomed Sunak into the job. His billionaire father-in-law, N.R. Narayana Murthy stated that Sunak would do his best for the people in the United Kingdom.
“We are proud to him and we wish his success,” Infosys founder (NYSE:) stated in a statement.
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