Work to fix Truss's 'mistakes' begins immediately, says PM Sunak

Truss spoke briefly outside 10 Downing Street before travelling to Buckingham Palace to formally offer her resignation to King Charles III, who officially appoints the British prime minister. As Truss left the palace, Sunak arrived and, after an audience, the King formally invited him to form a government.

The 42-year-old former hedge fund boss, who has only been in elected politics for seven years, has been tasked with bringing an end to the infighting and feuding at Westminster that has horrified investors and alarmed international allies.

Sunak is Britain's youngest prime minister for more than 200 years and its first leader of colour.

Speaking outside his new official residence at 10 Downing Street, Sunak paid tribute to Truss and said her plan to reignite economic growth had not been wrong, but he said mistakes were made.

"And I have been elected as leader of my party and your prime minister, in part to fix them," he said.

Sunak will now start forming his cabinet, with some Conservative lawmakers hoping he will include politicians from all wings of his Conservative Party.

Sunak said he was not daunted by the scale of the challenge as he became Britain's third prime minister in two months, pledging to restore trust, rebuild confidence and lead the country through an economic crisis.

"I fully appreciate how hard things are," he said outside the prime minister's residence where he shunned the normal tradition of standing with his family and political supporters.

"I understand too that I have work to do to restore trust, after all that has happened. 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."

Sunak, one of the richest men in parliament, is expected to slash spending to plug an estimated 40 billion pound ($45 billion) hole in the public finances created by an economic slowdown, higher borrowing costs and a six-month programme of support for people's energy bills.

With his party's popularity in freefall, Sunak will also face growing calls for an election if he moves too far from the policy manifesto that elected the Conservative Party in 2019 when then-leader Boris Johnson pledged to invest heavily in the country.

Sunak has warned his colleagues they face an "existential crisis" if they do not help to steer the country through the surging inflation and record energy bills that are forcing many households and businesses to cut back spending.

Reuters