Sunak Unveils 'Big Tent Cabinet'... Top Priority Is Stabilizing Financial Markets

Sunak UK Prime Minister Inaugurated Today "Top Priority Is To Unite Party And Country"
Government Bond Yields Plunge Bringing Relief... BOE Deputy Governor "Market Confidence Is Recovering"

On the 24th (local time), Rishi Sunak, former UK Chancellor of the Exchequer (center), was cheered by Conservative Party MPs at the Conservative Party Central Office in London. On this day, former Chancellor Sunak was elected as the 57th Prime Minister of the UK after former Prime Minister Boris Johnson announced he would not run, and Penny Mordaunt, the House of Commons Chief Whip, failed to register as a candidate in the party leadership election. London (UK) = AFP·Yonhap [Image source=Reuters Yonhap]

[Asia Economy Reporter Park Byung-hee] Former UK Chancellor of the Exchequer Rishi Sunak officially assumes office as UK Prime Minister on the 25th (local time).

According to major foreign media on the 24th, the UK Prime Minister's Office announced that Sunak, the designated Prime Minister, will have an audience with King Charles III at Buckingham Palace on the morning of the 25th. After receiving approval for his appointment as Prime Minister from King Charles III at Buckingham Palace, Sunak is scheduled to deliver his inaugural speech in front of 10 Downing Street at around 11:35 a.m.

Sunak ran unopposed in the Conservative Party leadership and Prime Minister election held after current Prime Minister Liz Truss announced her resignation, securing overwhelming support from more than 200 out of 357 Conservative MPs, and was elected as the next party leader and Prime Minister.

Sunak must immediately stabilize the financial markets, which have been thrown into turmoil following the Truss cabinet's announcement of a large-scale tax cut plan.

In his victory speech, Sunak warned of an economic crisis and emphasized unity and stability. He warned his Conservative colleagues that "it is clear we are facing a serious economic crisis" and stressed the need for "stability and unity." He said, "Becoming Prime Minister is the greatest honor and privilege of my life," and added, "My top priority will be to bring the party and the country together."

Fortunately, the UK government bond market welcomed Sunak's appointment as Prime Minister. The yield on 30-year UK government bonds closed at 3.75%, plunging 0.31 percentage points from the previous trading day. This is below the 3.77% recorded just before the Truss cabinet announced the large-scale tax cut plan on the 23rd of last month. The benchmark 10-year government bond yield also plunged 0.31 percentage points to 3.74%.

Dave Ramsden, Deputy Governor of the Bank of England (BOE), said, "At least in terms of government bond yields, market confidence is being restored," and added, "This situation needs to continue."

According to Sunak's close aides, Sunak is expected to retain Jeremy Hunt as Chancellor of the Exchequer to stabilize the financial markets. Officials said this also takes into account the Treasury's upcoming budget announcement on the 31st, which includes a medium-term fiscal plan. The intention is to prevent the risk of financial market instability by changing the head of the Treasury before a major announcement. The UK Treasury experienced severe turmoil after Sunak resigned as Chancellor in early July, with three ministers replaced in just over three months.

With speculation about Hunt's retention as Chancellor, Mel Stride and Steve Barclay, long-time supporters of Sunak and mentioned as candidates for Chancellor, are expected to take on other roles.

Sunak has reportedly communicated to fellow MPs his intention to form a cabinet with capable individuals regardless of political leanings. The aim is to form a big-tent cabinet to unify the Conservative Party, which has been divided by successive leadership changes.

The UK daily The Telegraph quoted sources close to Sunak as saying that Sunak will not repeat the mistake of former Prime Minister Truss, who filled her cabinet solely with her own supporters.

The Times analyzed that although it is unlikely that Truss would accept, if Sunak brings her in as Foreign Secretary, it would send a very strong message of unity. Truss held the position of Foreign Secretary before being elected Prime Minister.

Penny Mordaunt, who initially ran for Conservative Party leader and Prime Minister but withdrew at the last minute to endorse Sunak, is reportedly hoping for the Foreign Secretary position. There is also speculation that James Cleverly, the current Foreign Secretary, may be retained for the sake of unity. Cleverly ultimately declared support for Sunak in this leadership race but originally supported former Chancellor Johnson.

This content was produced with the assistance of AI translation services.