Prime Minister Rishi Sunak takes the reins with promise to fix Liz Truss's mistakes

Mr Sunak appointed at Buckingham Palace by King Charles III

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Rishi Sunak assumed power as the UK's new Prime Minister on Tuesday, promising to fix the mistakes of Liz Truss's ill-fated tenure.

Mr Sunak, 42, arrived in Downing Street after his appointment by King Charles III, who oversaw the handover of power for the first time.

Speaking for the first time as Prime Minister, he promised to bring stability amid what he called a “profound economic crisis”. The pound climbed as markets welcomed his appointment.

He succeeds Ms Truss just 49 days after she took power, after a misjudged package of tax cuts fatally damaged her authority.

Ms Truss “was not wrong to want to improve growth in this country. It is a noble aim and I admired her restlessness to create change. But some mistakes were made,” Mr Sunak said.

“And I have been elected as leader of my party and your prime minister in part to fix them. That work begins today.”

Mr Sunak promised to restore trust as he drew a line under the premierships of Ms Truss and Boris Johnson, who called off an audacious comeback attempt on Sunday.

In a six-minute speech, in which he was not flanked by family or supporters, he said difficult decisions lay ahead as ministers seek to reassure markets.

Jeremy Hunt, the Chancellor of the Exchequer brought in to stabilise the economy, was quickly re-appointed by Mr Sunak.

As he began forming his cabinet, ministers close to Ms Truss including Simon Clarke and Jacob Rees-Mogg announced they were leaving the government.

“I fully appreciate how hard things are. I understand too that I have work to do to restore trust after all that has happened,” Mr Sunak said.

“All I can say is that I am not daunted. I know the high office I have accepted and I hope to live up to its demands.”

Mr Sunak was invited to form a government at Buckingham Palace after winning the Conservative Party leadership on Monday.

He is the youngest prime minister for more than 200 years, the first Hindu and the first of Asian heritage.

As Britain's third leader in two months, he faces an array of challenges including economic strife, high inflation, the war in Ukraine and a fractured ruling party.

Ukrainian President Volodymyr Zelenskyy was among the first world leaders to send his congratulations, after US President Joe Biden called it a "groundbreaking milestone".

French President Emmmanuel Macron said France and Britain would "continue working to tackle the challenges of the moment", including the war in Ukraine.

While opposition parties call for an election, Mr Sunak signalled an early vote was not on the cards by saying he would return to the pledges of the Tory manifesto in 2019.

In a nod to Mr Johnson's victory that year, he said: "I know he would agree that the mandate my party earned in 2019 is not the sole property of any one individual."

Rishi Sunak through the years - in pictures

Mr Johnson's resignation in July was precipitated by a cabinet mutiny when Mr Sunak, the former chancellor of the exchequer, joined dozens of ministers in walking out.

But he called Mr Sunak's appointment a "historic day" and said it was a moment for the Conservatives to unite.

The president of a Hindu temple in Southampton set up by Mr Sunak's grandfather said the appointment of Mr Sunak was "our Barack Obama moment".

"It will unite the country, because he practises Hindu religion religiously and one of the key values we have is the whole world is our family and we believe in unity in that respect," Sanjay Chandarana told PA.

As part of the choreography of the handover, Mr Sunak spoke outside 10 Downing Street's black door and at a different lectern to the one used by Ms Truss.

Ms Truss earlier departed Downing Street with her husband and two daughters only 49 days after she took office.

In a defiant farewell speech, she defended the pro-growth policies that led to her demise but said that “brighter days lie ahead”.

Tory MPs turned on Ms Truss after her package of more than £40 billion ($45.2bn) in tax cuts caused mayhem in financial markets.

But she said: “We simply cannot afford to be a low-growth country where the government takes up an increasing share of our national wealth."

She said she was honoured to have overseen the mourning period for Queen Elizabeth II, who appointed Ms Truss her final prime minister two days before she died.

Liz Truss's final day as prime minister - in pictures

Updated: October 25, 2022, 11:35 PM