UK's Sunak warns of spending cuts ahead

New UK Prime Minister Rishi Sunak warned of spending cuts as he said the country was in an “economic crisis” and pledged to correct the financial “mistakes” made during the disastrous 45-day reign of Liz Truss.

In a speech outside Downing Street after being formally appointed by King Charles as Britain's fifth prime minister in six years, Sunak warned there would be “difficult decisions to come” as the nation faces up to a £40bn hole in its finances.

Sunak moved quickly to appoint a new Cabinet, his task made easier with the departure of unpopular Business Secretary Jacob Rees-Mogg who was widely tipped for the axe. Finance Minister Jeremy Hunt, appointed by Truss to replace Kwasi Karteng, was reappointed.

However, the new leader took a huge gamble by appointing the hard-right Suella Braverman as Home Secretary a week after she was sacked from the post by Truss for sending a policy document using her personal email. Unofficially the pair had clashed over immigration policy, but the row sparked the beginning of the end for the then prime minister.

Braverman, who has said she dreams of sending flights full of asylum seekers to Rwanda under the government's controversial deportation scheme, backed Sunak in the latest leadership contest against Penny Morduant, with Westminster insiders suggesting a deal had be done to ensure her support.

But the move places a question mark over Sunak's commitment to place "integrity" at the heart of his government. Her appointment means Grant Shapps was forced to move to the Department for Business.

Other Trussites jumped before they were pushed, including education secretary Kit Malthouse, levelling up minister Simon Clarke, justice secretary Brandon Lewis, work and pensions secretary Chloe Smith and Ranil Jayawardene, who was seen as a makeweight at the environment department.

Foreign Secretary James Cleverly and Defence Secretary Ben Wallace were retained. Dominic Raab returned as Justice Secretary, a post he held last year, and was also re-appointed as deputy prime minister.

Sunak moved to distance himself from the calamitous Truss, whose neoliberal economic policy and plans for unfunded tax cuts hammered financial markets, and the discredited Boris Johnson, thrown out by his own party for mismanagement and scandal.

Sunak said his government would show “integrity, professionalism and accountability”, a stark change in comparison with the previous Tory administrations. While praising Truss, he said "mistakes were made".

"I will place economic stability and confidence at the heart of this government’s agenda. This will mean difficult decisions to come," he said.

"The government I lead will not leave the next generation – your children and grandchildren – with a debt to settle that we were too weak to pay ourselves."

Earlier, Truss delivered a tin-eared and unapologetic resignation speech, defiantly standing by her mini-budget which triggered her humiliating departure after a tenure that lasted less than half as long as her leadership campaign.

Reporting by Frank Prenesti for Sharecast.com