The former chancellor’s path to office was cleared on Sunday when ex-prime minister Boris Johnson abandoned his hopes of a comeback, after securing the public backing of just over 50 MPs.
Penny Mordaunt, House of Commons leader and Sunak’s last remaining rival for the Conservative party leadership following Truss’s resignation last week, pulled out of the contest at the last minute ahead of the deadline for nominations at 2pm on Monday.
Mordaunt’s withdrawal meant that Sunak was the only leadership candidate and the contest ended without the need for an online vote by Conservative party members.
Sunak, 42, is younger than both Tony Blair and David Cameron when they became prime minister. His Indian grandparents emigrated to Britain from east Africa and he grew up in Southampton.
Although he won the overwhelming backing of Tory MPs, Sunak is a divisive figure in the Tory party, with many supporters of Johnson accusing him of undermining his premiership when he quit as chancellor in July.
Sunak now faces a daunting in-tray, including a crisis in the public finances, high inflation, stretched public services, industrial unrest, soaring energy bills and even the possibility of blackouts in the new year.
Sunak, a fiscal conservative who has vowed to “fix the economy”, promised in a statement on Saturday: “There will be integrity, professionalism and accountability at every level of the government I lead.”
Financial markets responded positively to Sunak’s expected “coronation” on Monday in what has been dubbed in the City of London “the dullness dividend” following the turmoil unleashed by Truss and her tax-cutting “mini” Budget.
As chancellor, Sunak put up taxes to try to restore order to public finances that were stretched by the Covid-19 pandemic.
Sunak is expected to keep Jeremy Hunt, another fiscal conservative, as his chancellor. The Treasury is working on the assumption that a medium-term debt-cutting plan will be presented to parliament on October 31, as Truss had proposed.
Sunak has to try to reunite a deeply divided Conservative party following Truss’s catastrophic 44-day premiership, starting with the task of assembling a new cabinet.
Depending on the choreography of the transfer of power, Sunak could be invited by King Charles to form a government as early as Monday.
Gilts and sterling rallied on Monday following Johnson’s exit from the race to become the UK’s next prime minister, as investors bet that Britain was likely to stick with policies outlined by Hunt that have calmed markets in recent days.
The 10-year gilt yield sank 0.24 percentage points to trade at 3.81 per cent early on Monday, reflecting a sizeable price rise. The pound climbed by as much as 0.9 per cent against the dollar in early trading.
