<\/p>\n
By Elizabeth Piper, Alistair Smout and William James<\/p>\n
London \u2013 Rishi Sunak will become Britain\u2019s first prime minister of colour on Tuesday after he won the race to lead the Conservative Party, tasked with steering a deeply divided country through an economic downturn set to leave millions of people poorer.<\/p>\n
One of the wealthiest politicians in Westminster, Sunak, 42, will become the country\u2019s youngest leader in modern times \u2013 and its third in less than two months \u2013 as he takes over during one of the most turbulent eras in British political history.<\/p>\n
He replaces Liz Truss, who only lasted 44 days before she said she would resign, needing to restore stability to a country reeling from years of political and economic turmoil and seeking to lead a party that has fractured along ideological lines.<\/p>\n
He told his lawmakers in parliament on Monday that they faced an \u201cexistential crisis\u201d and must \u201cunite or die\u201d. He told the country it faced a \u201cprofound economic challenge\u201d.<\/p>\n
\u201cWe now need stability and unity, and I will make it my utmost priority to bring our party and our country together,\u201d he said.<\/p>\n
The multi-millionaire former hedge fund boss will be expected to make deep spending cuts to try to rebuild Britain\u2019s fiscal reputation, just as the country slides into one of the toughest downturns in decades, hit by the surging cost of energy and food.<\/p>\n
A recent mini budget by Truss, which triggered her downfall, pushed up borrowing costs and mortgage rates, and sent investors fleeing. British government bonds rallied aggressively in the run-up to Sunak\u2019s victory, and extended their gains on Monday.<\/p>\n
Sunak, who will be appointed prime minister by King Charles on Tuesday, will also have to work hard to hold Britain\u2019s dominant political party together after some accused him of treachery earlier this year when he resigned from the cabinet of former leader Boris Johnson, triggering his downfall too.<\/p>\n
Other Conservatives say he is too rich to understand the day-to-day economic pressures building in Britain, and worry whether he could ever win an election for a party that has been in power for 12 years.<\/p>\n
\u201cI think this decision sinks us as a party for the next election,\u201d one Conservative lawmaker told Reuters on condition of anonymity.<\/p>\n
PERMA-CRISIS<\/strong><\/p>\n Britain has been locked in a state of perma-crisis ever since it voted in 2016 to leave the European Union, unleashing a battle at Westminster over the future of the country that remains unresolved to this day.<\/p>\n Johnson, the face of the Brexit vote, led his party to a landslide victory in 2019, only to be driven out of office less than three years later after a series of scandals. His successor Truss lasted just over six weeks before she too was forced out.<\/p>\n Historian and political biographer Anthony Seldon told Reuters that Sunak had the most difficult economic and political inheritance of any British leader since World War Two, and would be constrained by the mistakes made by his predecessor Truss.<\/p>\n \u201cThere is no leeway on him being anything other than extraordinarily conservative and cautious,\u201d he said.<\/p>\n He added that Sunak had shown composure when he became finance minister just as the Covid-19 pandemic hit Britain.<\/p>\n Amid the turmoil, polls show that Britons want an election. The Conservatives do not have to hold one until January 2025.<\/p>\n Angela Rayner, deputy leader of the opposition Labour Party, said the Conservatives had \u201ccrowned Rishi Sunak as prime minister without him saying a single word about how he would run the country and without anyone having the chance to vote.\u201d<\/p>\n Labour has held record leads in opinion polls of more than 25 points ever since Truss\u2019s budget sent shockwaves through financial markets.<\/p>\n Economists and investors welcomed Sunak\u2019s appointment, but questioned whether he can tackle the country\u2019s finances while holding the party\u2019s warring factions together.<\/p>\n Many Conservative lawmakers appeared relieved that the party had at least selected a new leader quickly.<\/p>\n Penny Mordaunt, who lost out to Sunak, said his election was an \u201chistoric one and shows, once again, the diversity and talent of our party,\u201d she said. \u201cRishi has my full support.\u201d<\/p>\n Veteran lawmaker Crispin Blunt told Reuters after Sunak met lawmakers in a room in parliament: \u201cThe party will remain united, not least because we don\u2019t have a choice. In there, he showed a capacity to marshal the whole party.\u201d<\/p>\n INDIAN ORIGIN<\/p>\n The first real test of unity will come on Oct. 31, when finance minister Jeremy Hunt \u2013 the fourth person in the role in four months \u2013 is due to present a budget to plug a black hole in the public finances that is expected to have ballooned to up to 40 billion pounds.<\/p>\n The task will be helped by a recovery in the bond market, with the 30-year gilt GB30YT=RR, which suffered unprecedented losses after the mini-budget on Sept. 23, now recovered to levels close to those seen early on that day.<\/p>\n Sunak\u2019s appointment is another first for Britain \u2013 he will become the country\u2019s first prime minister of Indian origin.<\/p>\n His family migrated to Britain in the 1960s, a period when many people from Britain\u2019s former colonies moved to the country to help it rebuild after World War Two.<\/p>\n Sunak attended Oxford University and Stanford University where he met his wife Akshata Murthy, whose father is Indian billionaire N. R. Narayana Murthy, founder of outsourcing giant Infosys Ltd. Among the many messages of support, he received \u201cwarmest congratulations\u201d from Indian leader Narendra Modi.<\/p>\n