Rishi Sunak Selected As UK's Next Prime Minister: What You Need To Know

Former chancellor Rishi Sunak has been selected to succeed Liz Truss as the U.K.'s newest prime minister.

What To Know: Sunak will take over control of the world’s sixth-largest economy, replacing Truss, the country's shortest-serving leader of all time, per the Wall Street Journal. Sunak will become the third person to lead the country in the last two months and the fifth person to take the helm since 2016.

At the beginning of September, Sunak lost to Truss in a close race to become prime minister. Truss resigned from her role as prime minister following a tumultuous few weeks in which she attempted to push through risky tax-cut plans.

Truss introduced an economic program to stimulate the economy with tax cuts, but it was rejected by investors, which sent the pound spiraling to record lows.

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Why It Matters: Broader markets are reacting positively to Sunak's victory on Monday. The SPDR S&P 500 SPY was up close to 1% at last check and yields on government debt are falling as investors bet that Sunak will be able to strengthen the nation’s financial standing.

Sunak previously criticized Truss's plans to immediately cut taxes, noting that Britain’s high inflation needed to be addressed before any taxes were cut back.

"I don’t think you can have your cake and eat it," Sunak reportedly said in August.

At the end of October, the U.K. Treasury is expected to outline plans to cut spending in order to fill a deficit in public finances.

"The choice the party makes now will decide whether the next generation of British people will have more opportunities than the last," Sunak reportedly said over the weekend.

SPY Price Action: The SPY was up 0.98% at $377.91 at time of publication, according to Benzinga Pro.

Photo: Ministry of Housing from Flickr.