Rishi Sunak officially takes over as British prime minister

Rishi Sunak was installed as Britain's third prime minister of the year by King Charleson Tuesday, and then set about forming a cabinet that will have to wrestle with the U.K.'s economic and political crises.

King Charles assumed the ceremonial role of accepting Liz Truss's resignation at Buckingham Palace before asking Sunak to form a government.

Sunak then returned to the prime minister's office at 10 Downing St., promising to tackle Britain's "profound economic crisis"and earn the country's trust in an address to the nation.

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

Sunak pledged in doing so to "not leave the next generation your children and your grandchildren with a debt to settle that we were too weak to pay ourselves."

Sunak was selected as leader of the governing Conservative Party on Monday as it tries to stabilize the economy, and its own plunging popularity, after the brief, disastrous term of Truss.

WATCH l Truss pledges stability, but says tough decisions are ahead:

'Trust is earned. And I will earn yours,' says Britain's new PM

2 years ago

Duration 4:00

New British Prime Minister Rishi Sunak warned the people of the U.K. of 'difficult decisions to come' as he was installed as the third prime minister of the year and prepared to tackle the country's economic crisis.

Truss departed after making a public statement, seven weeks to the day after she was appointed prime minister by Queen Elizabeth, who died two days later.

Truss offered a defence of her low-tax economic vision and her brief term in office before being driven from the prime minister's official residence for the last time.

"I am more convinced than ever that we need to be bold and confront the problems we face," she said. She stood by the free-market principles of "lower taxes" and "delivering growth," despite the market mayhem triggered by her Sept. 23 budget package.

Challenging times for new leader

Sunak becomes prime minister in a remarkable reversal of fortune just weeks after he lost to Truss in a Conservative election to replace former prime minister Boris Johnson. Party members in the summer chose her tax-cutting boosterism over his warnings that inflation must be tamed.

Sunak the first prime minister of colour and, at 42, the youngest British leader for more than 200 years must try to shore up an economy sliding toward recession and reeling after his predecessor's experiment in libertarian economics, while also attempting to unite a demoralized and divided party that trails far behind the opposition in opinion polls.

He characterized Truss's approach, which spooked the markets, as a well-meaning attempt "not born of ill will" to promote growth, but ultimately a mistake.

Next week's budget statementwill set out how the government plans to come up with billions of pounds to fill a fiscal hole created by soaring inflation and a sluggish economy.

The statement, set to feature tax increases and spending cuts, will be made in Parliament on Oct. 31. Treasury chief Jeremy Hunt, who replaced Truss pick Kwasi Kwarteng, has been retained in the role by Sunak and will deliver that statement.

The Conservative Party account in a series of tweets detailed the retention of Hunt as well as other Cabinet roles in the new Sunak government.

Ben Wallace, James Cleverly and Suella Braverman will stay in roles originally tapped under Truss defence secretary, foreign secretary and home minister. Dominic Raab, who found himself on the outside of Truss's Cabinet, returns as justice secretary and deputy prime minister, roles he served in the Johnson government.

Truss conceded last week that she could not deliver on her plans but only after her attempts triggered market chaos and worsened inflation at a time when millions of Britons were already struggling with soaring borrowing costs and rising energy and food prices.

The party is now desperate for someone to right the ship after months of chaos under Truss and Johnson, who quit in July after becoming mired in ethics scandals.

"I understand, too, that I have work to do to restore trust after all that has happened," Sunak said in his first speech as prime minister.

Sunak was chosen as Conservative leader after becoming the only candidate to clear the hurdle of 100 nominations from fellow MPs to run in the party election. Sunak defeated rival Penny Mordaunt, who may get a job in his government, and the ousted Johnson, who dashed back from a Caribbean vacation to rally support for a comeback bid but failed to get enough backing to run.

Mordaunt stays on as party leader in the House of Commons under Sunak.

Conservative lawmaker Victoria Atkins, a Sunak ally, said the party would "settle down" under Sunak.

"We all understand that we've now really got to get behind Rishi and, in fairness, that's exactly what the party has done," she told radio station LBC.

Opposition Leader Keir Starmer congratulated Sunak in a statement, but again implied that the country needs an early election, though the mandate for one doesn't expire until January 2025.

"The Tories have crashed the economy, with low wages, high prices and a cost of living crisis," said Starmer, leader of the Labour Party. "The public needs a fresh start and a say on Britain's future."