Economy  

Nadhim Zahawi appointed chancellor after Sunak resigns

Nadhim Zahawi appointed chancellor after Sunak resigns
Nadhim Zahawi, the new chancellor of the Eexchequer, pictured this morning (July 6) (REUTERS/Phil Noble)

Nadhim Zahawi has been appointed as chancellor of the exchequer, after dramatic resignations from cabinet heavyweights shook the UK government.

Zahawi was appointed last night (July 5) to replace Rishi Sunak, who stood down from cabinet hours earlier.

Health secretary Sajid Javid had resigned minutes earlier, with both MPs saying they had lost confidence in the prime minister.

Over the past week prime minister Boris Johnson has been embroiled in a row over his role in appointing MP Chris Pincher as deputy chief whip earlier this year.

Pincher resigned last week after allegedly groping two men at a private member’s club in London.

But there were questions over whether Johnston was aware of a separate sexual misconduct allegation made against Pincher before he was appointed to the role of deputy whip.

The revelations come weeks after 41 per cent of Conservative MPs voted against the prime minister in a no-confidence vote.

A handful of junior ministers also quit last night, including solicitor general Alex Chalk, minister for children and families Will Quince, as well as a number of parliamentary private secretaries.

However, other cabinet members have come out in support of the PM, including deputy prime minister Dominic Raab, foreign secretary Liz Truss, defence secretary Ben Wallace and levelling-up secretary Michael Gove.

UK economic situation

Zahawi takes up the role of Chancellor at a critical time for the UK economy.

With inflation expected to hit double figures later this year, driven in part by the energy price cap which is due to be reviewed in October, the cost of living is beginning to impact millions of households across the UK.

Yesterday the Bank of England warned that the global economic outlook has “deteriorated markedly” and increased the amount of cash banks are required to hold as a buffer against future shocks.

Government criticisms

In his resignation letter, Sunak said the public “rightly expect government to be conducted properly, competently, and seriously” and hinted at prior disagreements over policy.

“I have respected the powerful mandate given to you by the British people…that is why I have always tried to compromise…on those occasions where I disagreed with you privately, I have supported you publicly,” he said.

Sunak added that he and the prime minister share a desire for a low-tax, high-growth economy, and world class public services, but this can only be responsibly delivered through a combination of hard work, sacrifices and difficult decisions.

The former chancellor’s resignation letter was released minutes after health secretary Sajid Javid also stood down from cabinet. 

Javid said although he was a team player, “the British people also rightly expect integrity from their government.”

He added that he had lost his confidence in the prime minster’s premiership, calling last month’s vote of confidence a “moment for humility, grip and new direction.”