Rishi Sunak becomes UK’s first Indian origin Prime Minister
25 Oct 2022
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Rishi Sunak on Tuesday assumed office as UK Prime Minister, becoming the first Indian-origin person to head the UK cabinet and the Conservative party, after being invited by King Charles III to form a government.
Sunak became the PM when he won the Conservative Party leadership race after his opponents - former Prime Minister Boris Johnson and House of Commons leader Penny Mordaunt – backed out.
Sunak met the king at Buckingham Palace after the latter accepted the resignation of Liz Truss.
Addressing the cabinet o Tuesday, after assuming office, the 42-year-old Sunak said he had been appointed in part to fix the mistakes made by his predecessor Liz Truss and warned the country might have to face difficult decisions to overcome a “profound economic crisis”.
Speaking at her final cabinet meeting at 10 Downing Street before heading towards Buckingham Palace to formally tender her resignation to King Charles, Liz Truss said her government had acted "urgently and decisively" to help hard-working families and provided assistance to thousands of businesses to avoid bankruptcy.
Truss, who stepped down last Thursday after 45 days in office, said it was "a huge honour" to be prime minister and to lead the nation in mourning the death of Queen Elizabeth II and welcoming the accession of King Charles III.
She wished incoming prime minister every success. "We must out-compete the autocratic regimes... I know brighter days lie ahead," she added.
Former UK PM Boris Johnson also congratulated Rishi Sunak on being appointed as the British PM. "Congratulations to Rishi Sunak on this historic day, this is the moment for every Conservative to give our new PM their full and wholehearted support," Johnson wrote on Twitter.
Markets greeted Rishi Sunak’s elevation as Britain's next prime minister. The British pound firmed up and stokes moved up after a period of turmoil, But Sunak must ensure that his team is focused on keeping London competitive as a global financial centre, the CEO of lender HSBC said.
"We're very pleased that there has been a decision taken on the UK Prime Minister position, that now allows the markets to stabilise as you can see in the way the markets reacted yesterday, that's positive," Reuters quoted HSBC CEO Noel Quinn as saying after the bank posted third-quarter earnings.
The nature of the economic challenge Rishi Sunak faces is quite daunting. According to the findings of an analysis done by the Institute of Fiscal Studies (in the UK):
- In the near term, the key challenge facing the UK economy is the terms-of-trade shock – an increase in the price of imports relative to exports that crimps domestic income and weighs heavily on demand across both the household and corporate sectors over the coming year.
- For households, the looming cost shock will hit those least able to bear it…In the medium term, sharp increases in mortgage costs may push any consumer recovery into 2024.
- The weakness on the supply side of the UK economy is now an urgent concern. While output is 2.6 per cent short of its pre-Covid trend, we estimate current excess demand in the order of 1.4 per cent of GDP.
An investment banker-turned-politician, Sunak was born in a Punjabi Khatri family and his paternal grandfather had moved to Africa from Gujranwala (now in Punjab) before India gained Independence. Later, Sunak’s father moved to the UK.
Sunak is married to Infosys founder Narayana Murthy’s daughter Akshata Murthy and the couple have two daughters – Krishna (11), and Anoushka (9).
“Congratulations to Rishi. We are proud of him and we wish him success. We are confident he will do his best for the people of the United Kingdom,” Murthy said in a brief statement after it became clear that Sunak would be Britain’s next Prime Minister.
Prime Minister Narendra Modi Monday said he looked forward to working together with him to transform the India-UK ties into a modern partnership.
Warmest congratulations @RishiSunak! As you become UK PM, I look forward to working closely together on global issues, and implementing Roadmap 2030. Special Diwali wishes to the 'living bridge' of UK Indians, as we transform our historic ties into a modern partnership.
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