Rishi Sunak has told party colleagues they must “unite or die” as he becomes the first UK prime minister of Asian descent and the youngest in more than 200 years.

The 42-year-old of Indian heritage won the race to replace Liz Truss (who only lasted 44 days in the job) after rivals Penny Mordaunt and ex-PM Boris Johnson pulled out.

He will be invited by King Charles to officially form a government on Tuesday (local time) — one day after claiming the numbers to lead the Conservative Party, which required 100 nominations from MPs.

Mr Sunak sets records as he will also become the UK’s first Hindu prime minister and the youngest prime minister since 1812.

He will arguably be the richest prime minister, sitting on a family fortune of about £730 million ($1.3 billion), meaning the occupants of Number 10 Downing Street will be far richer than the King.

After winning the leadership in the most rapid comeback in modern history, the former finance minister reportedly told his colleagues they faced an “existential threat” after the recent political turmoil.

In a short address to the nation, he said the United Kingdom faced “profound economic challenges”.

“We now need stability and unity, and I will make it my utmost priority to bring our party and our country together,” he said.

Incoming prime minister Rishi Sunak departs Conservative party headquarters. Photo: Getty

Mr Sunak, one of the wealthiest politicians in Westminster, is tasked with steering a deeply divided country through an economic downturn set to leave millions of people poorer.

He will step up to lead the UK as it heads for one of the toughest downturns in decades.

The multi-millionaire former hedge fund boss will be expected to launch deep spending cuts just as the country slides into a recession, dragged down by the surging cost of energy and food.

Mr Sunak will also have to work hard to hold his party together after some accused him of treachery earlier this year when he resigned from the cabinet of former leader Boris Johnson, triggering his downfall too.

A ‘coronation’, not an election

Labour’s deputy leader Angela Rayner said Mr Sunak’s leadership comeback, after losing to Ms Truss just over a month ago, was a coronation because “nobody voted for this”.

“The Tories have crowned Rishi Sunak without him saying a word about what he would do as PM,” she wrote on Twitter.

“He has no mandate, no answers and no ideas.

“The public deserve their say on Britain’s future through a general election.”

Tweet from @AngelaRayner

Some Conservatives say Mr Sunak is too rich to understand the day-to-day economic pressures building in the UK, and question whether he could ever win an election for a party that has been in power for 12 years.

“I think this decision sinks us as a party for the next election,” one Conservative MP told Reuters on condition of anonymity.

UK government bonds rallied aggressively in the run-up to Mr Sunak’s victory, and extended their gains on Monday.

Economists and investors welcomed Sunak’s appointment but questioned whether he can tackle the country’s finances while holding the party’s warring factions together.

Penny Mordaunt, who lost out to Sunak, said his election was an “historic one and shows, once again, the diversity and talent of our party,” she said.

“Rishi has my full support.”

Tweet from @PennyMordaunt

A ‘serious person for serious times’

The first real test of unity will come on October 31 when finance minister Jeremy Hunt is due to present a budget to plug a black hole in the public finances that is expected to have ballooned to up to 40 billion pounds.

Vindicated in his warnings of catastrophe over the tax-cutting agenda of Ms Truss, it was the former chancellor’s economic experience that precipitated his resurgence.

But his record-breaking biography is also bound to create political challenges at a time when he will have to make potentially punishing decisions during a cost-of-living crisis.

He positioned himself as the candidate prepared to tell hard truths about the state of public finances rather than the “comforting fairy tales” of his rival.

Mr Sunak argued that her unfunded tax cuts at a time of spiralling inflation were dangerous, predicting they would lead to surging mortgage rates.

He was right but he did not crow “I told you so”.

Instead Mr Sunak kept a low profile during the weeks that followed, staying away from the Conservative conference overshadowed by infighting and a U-turn on the abolition of the top rate of income tax.

The scale of the market shock only strengthened his backers’ pitch to Conservative MPs that his “calm competence” showed he is a “serious person for serious times”.

Born in 1980 in Southampton, the son of parents of Indian Punjabi descent, Mr Sunak’s father was a family doctor and his mother ran a pharmacy, where he helped her with the books.

After private schooling at Winchester College, where he was head boy, and a degree in philosophy, politics and economics at Oxford, he took an MBA at Stanford University in the US where he met his wife, Akshata Murty, the daughter of India’s sixth richest man.

A successful business career, with spells at Goldman Sachs and as a hedge fund manager, meant by the time he decided to enter politics in his early 30s he was already independently wealthy.

In 2014 he was selected as the Conservative candidate for the ultra-safe seat of Richmond in North Yorkshire — then held by William Hague — and was duly elected in the general election the following year.

Rishi Sunak’s wife Akshata Murthy and parents Usha Sunak and Yashvir Sunak. Photo: Getty

In the 2016 Brexit referendum he supported the Leave camp, to the reported dismay of then-prime mininster David Cameron who saw him as one of the Conservatives’ brightest prospects among the new intake.

Given his first government post, as a junior local government minister, by Mr Cameron’s successor Theresa May, he was an early backer of Mr Johnson for leader when she was forced out amid the fallout over Brexit.

When Mr Johnson entered Number 10 in July 2019, there was swift reward with a promotion to the cabinet as treasury chief secretary.

An even bigger step up followed in February 2020 when Sajid Javid quit as chancellor and Mr Sunak was put in charge of the country’s finances at the age of just 39.

The rapid spread of COVID-19 meant his mettle was swiftly tested.
Within a fortnight of his first budget he was effectively forced to rip up his financial plans as the country went into lockdown.

The new chancellor — who saw himself as a traditional small-state, low-tax Conservative — began pumping out hundreds of billions in government cash as the economy was put on life support.

But as the UK emerged from the pandemic, some of the gloss began to wear off, amid growing tensions with his neighbour in Number 10 and anger among Conservative MPs over rising taxes as he sought to rebuild the public finances.

To add to his woes, he was caught up in the “partygate” scandal, receiving a fine, along with Mr Johnson, for attending a gathering to mark the prime minister’s 56th birthday, even though he claimed only to have gone into Number 10 to attend a meeting.

There were more questions when it emerged his wife had “non-dom” status for tax purposes, an arrangement which reportedly saved her millions, while he had retained a US “green card,” entitling him to permanent residence in the US.

Rishi Sunak with daughters Krisna and Anoushka and wife Akshata Murthy while campaigning in July. Photo: Getty

For a man known for his fondness for expensive gadgets and fashionable accessories, and who still has an apartment in Santa Monica, it all looked dangerously out of touch at a time when spiralling prices were putting a financial squeeze on millions across the country.

His frustrations with Mr Johnson’s chaotic style of government, as well as a deepening rift over policy, finally spilled over when he dramatically resigned, prompting the rush for the door by other ministers which forced the prime minister to admit his time was up.

Mr Sunak was unrepentant over his decision to quit even as he admitted that it was a decision that may have damaged his standing among a grassroots that picked Johnson as prime minister only a few years earlier.

The need to maintain power at the top of a parliamentary party that is on to its third leader in less than two months is now Mr Sunak’s problem.

-with AAP