Since entering the contest to be British prime minister, frontrunner Rishi Sunak has said little publicly about how he intends to run the country and how he would address multiple economic and political crises.
His fortunes shone when immediate past Prime Minister Liz Truss was brought down after just six weeks in office by her economic program which roiled financial markets, pushed up living costs for voters and enraged much of her own party.
A former Goldman Sachs analyst, Sunak will be the United Kingdom's first prime minister of Indian origin.
He is tasked with steering the country through an economic crisis and mounting anger among some voters.
Ruth Gregory, senior UK economist at Capital Economics in London said: "The fall in gilt yields on the news today that Rishi Sunak will become the UK's next Prime Minister has reduced the chances of a significant fiscal consolidation. Even so, the new PM will still have to work hard to restore stability in the eyes of the financial markets."
Britain's financial markets were plunged into turmoil on September 23 after then-new finance minister Kwasi Kwarteng announced billions of pounds of unfunded tax cuts.
The Bank of England was forced into emergency bond-buying to stem a sharp sell-off in Britain's $2.3 trillion government bond market that threatened to wreak havoc in the pension industry and increase recession risks.
Kwarteng's replacement Jeremy Hunt earlier scrapped nearly all of the economic plan and scaled back Truss's vast energy support scheme, announced in September, in a historic U-turn to try and restore investor confidence.
The BoE interventions have highlighted a growing segment of Britain's pensions sector -- liability-driven investment.
Sunak ran unsuccessfully to be prime minister earlier this year, setting out a full policy platform.
Although some of the challenges have changed since then, what does that campaign tell us about how he would govern?
Economic challenges
Britain is facing an economically toxic combination of recession and rising interest rates.
The Bank of England is trying to tame double-digit inflation while consumers face rising costs and falling real incomes, reports Reuters.
Britain has to restore its international financial credibility after outgoing leader Liz Truss's plan for unfunded tax cuts and a costly energy price guarantee spooked the bond market last month and forced the Bank of England to intervene.
To balance a budget shortfall made worse by the rising borrowing costs that the crisis caused, the next prime minister will most probably have to oversee spending cuts and tax rises. A fiscal statement addressing this is due on Oct. 31.
That comes as the government faces pressure to help vulnerable households through a painful financial squeeze, with a jump in mortgage costs adding to rising food, heating and fuel prices caused by the war in Ukraine and other global factors.
Economic policies
In a statement issued on Sunday announcing his candidacy, Sunak said the country faced a "profound economic crisis".
As finance minister between February 2020 and July 2022, he set Britain on course to have its biggest tax burden since the 1950s. He also set out higher public spending but simultaneously promised more discipline and to cut waste.
During the summer leadership campaign he criticized Truss's tax-cutting agenda, saying he would instead only cut taxes once inflation had been brought under control. At the time he outlined a plan to cut income tax from 20% to 16% by 2029.
Sunak has backed the independence of the Bank of England and stressed the importance of government policy working alongside the central bank to tame inflation, not exacerbating it.
Sunak inherits crisis economy
Outgoing Prime Minister Truss resigned after her budget of tax cuts funded by debt sent shockwaves through markets, crashing the pound.
That caused the government to U-turn on most of its budget, including scaling back a cap on soaring energy bills that have contributed heavily to a cost-of-living crisis for tens of millions of Britons, reports AFP.
Data Monday showed Britain's economic downturn has worsened in October, with private-sector output at a 21-month low.
"October's flash PMI data showed the pace of economic decline gathering momentum after the recent political and financial market upheavals," noted Chris Williamson, chief business economist at S&P Global Market Intelligence that helped compile the figures.
"The heightened political and economic uncertainty has caused business activity to fall at a rate not seen since the global financial crisis in 2009 if pandemic lockdown months are excluded."
Williamson added that upcoming data would likely show Britain already in recession.
The S&P Global/ CIPS flash UK composite purchasing managers index stood at 47.2 in October, below September's level of 49.1.
A figure under 50 indicates a contraction.
The UK is not alone, however, with separate S&P data pointing to "impending recession" in Germany, Europe's biggest economy.
The former chancellor of the exchequer had warned in the battle to succeed Johnson that tax cuts promised by Truss when government debt had already soared on Covid interventions was the wrong policy to pursue.
He was proved right as the budget sent the pound crashing to a record-low close to parity with the dollar and triggered yields on government bonds to soar.
With Sunak seen as bringing stability to markets, sterling rose and yields fell Monday.
"Investors clearly hope Sunak will stabilize the economy and the political situation -- though it's hard to work out at this point which is the harder task," said AJ Bell financial analyst Danni Hewson.
"As well as the recovery in sterling and the reduced cost of government borrowing (as yields drop), Sunak will be pleased to see European gas prices" falling.
However, with UK inflation at a 40-year high above 10 percent, the Bank of England is set to unveil another bumper interest-rate hike at a regular policy meeting next week.
This will heap further pressure on borrowers, including homeowners who have seen mortgage rates surge in the wake of the government's costly budget.
Shevaun Haviland, director general of the British Chambers of Commerce, urged Sunak to also help out businesses struggling with huge energy bills.
"The political and economic uncertainty of the past few months has been hugely damaging to British business confidence and must now come to an end," she said in a statement after Sunak's new position was confirmed.
"The new prime minister must be a steady hand on the tiller to see the economy through the challenging conditions ahead.
"This means setting out fully costed plans to deal with the big issues facing businesses; soaring energy bills, labour shortages, spiralling inflation, and climbing interest rates."