FirstFT: Rishi Sunak to become UK prime minister

Rishi Sunak will enter Downing Street today as Britain’s youngest prime minister in modern times and its first non-white leader, with a vow to get to grips with the “profound economic challenge” facing the country.

He is being urged by chancellor Jeremy Hunt to press ahead with a new debt-cutting plan next week, ahead of a crucial interest rate-setting Bank of England meeting on November 3.

Liz Truss, who resigned after a calamitous 44-day spell as prime minister, will hold her final cabinet meeting today before tendering her resignation to King Charles.

Sunak, 42, will then travel to Buckingham Palace to meet the monarch before returning to Number 10 at about 11.30am to start forming a cabinet; the new prime minister’s allies expect Hunt to stay on as chancellor.

Dave Ramsden, the BoE’s deputy governor, noted that gilt yields were now not far above their level before Truss’s disastrous “mini” Budget on September 23, but only after a series of policy U-turns.

“Credibility is being recovered, at least on that benchmark measure, but that has to be followed through,” he said.

Five more stories in the news

1. EY Israel rejects break-up plan The Big Four firm’s Israel partners will not split their audit and consulting businesses, shunning a spin-off plan approved by global leadership last month. The plan promises to dramatically reshape the accounting landscape and is being watched across the industry. EY is racing to hash out more details of the proposal ahead of country-by-country partner votes.

2. Turkey defends Russia ties Finance minister Nureddin Nebati in a rare interview defended Ankara’s economic ties with Russia as “good neighbourly relations” as western governments raise concerns that the country is serving as a backdoor for Moscow to evade sanctions. Nebati said “opposition elements” were “deliberately raising question marks”, while conceding there had been a rush of cash into Turkey’s financial system.

3. Prepayment meters forced on the vulnerable The number of prepayment meters is rising on a quarterly basis, as UK energy suppliers are set to switch 10,000 households a month to the expensive plan. The rise in prepayment meters is an early sign of distress in the energy market, with a majority of households pushed into using them when they fall behind on regular bill payments.

4. RBC plans UK commercial banking push Royal Bank of Canada is looking to enter the UK’s commercial banking market potentially through an acquisition and to expand in wealth management, chief executive Dave McKay told the Financial Times. The head of Canada’s largest bank by market value said he was keen to expand once RBC fully integrated its private bank with Brewin Dolphin, which it bought for £1.6bn this year.

5. China’s wealthy activate escape plans The country’s business elites are pulling the trigger on exit plans from their homeland as pessimism builds over the future of the world’s second-largest economy under Xi Jinping. Their advisers say the president’s ironclad grip on power and potential to rule for the rest of his life are a tipping point.

The day ahead

Future Investment Initiative The event dubbed “Davos in the Desert” begins in Riyadh. Although relations between the US and Saudi Arabia have plunged to a new low, American bankers and investors — including Jamie Dimon, Stephen Schwarzman and David Solomon — are still flocking to the conference.

Economic data The Ifo business confidence survey comes out in Germany, and Hungary’s central bank announces its interest rate decision. Poland has September unemployment figures, and Sweden and Spain release their producer price indices.

Earnings Alphabet, Carrefour, Corning, General Electric, Halliburton, JetBlue Airways, Juniper Networks, Kuehne+Nagel, Mattel, Norsk Hydro, Novartis, Orange, Randstad, Raytheon Technologies, SAP, Spotify, UBS, United Parcel Service and Xerox release third-quarter figures. Microsoft has Q1 earnings, Visa has Q4 earnings and HSBC Holdings publishes its Q3 trading statement. See a complete list here.

Ukraine German chancellor Olaf Scholz and European Commission president Ursula von der Leyen host a conference in Berlin on the postwar reconstruction of Ukraine.

What else we’re reading

The fight over prized JPMorgan wealth clients Infighting at JPMorgan Chase over how to manage the fortune of retired baseball star Alex Rodriguez has escalated into a two-year battle that has laid bare tensions between the private bank and wealth advisory business. The squabble has involved prominent personalities such as pop star Jennifer Lopez and author Malcolm Gladwell, as well as chief executive Jamie Dimon.

“I thought he was supposed to be a statesman, Jamie Dimon. This is like a game an 11-year-old would play” —Malcolm Gladwell 

Xi Jinping’s China and the rise of the ‘global west’ If the US is to keep its international network of allies together, it will have to persuade its partners that the darkest fears about Russia and China are justified, writes Gideon Rachman. Recent scenes from Beijing help to make that case.

TSMC faces challenges as world demands ever-smaller chips Chipmakers are bumping up against the laws of physics as they strive to make semiconductors faster and more power-efficient. Will the world’s largest contract chipmaker stay ahead of the pack as the industry is forced to develop new transistor technology?

Office workers embrace hybrid working Trips to workplaces in the world’s seven largest economies are still well below levels from before the coronavirus took hold in early 2020, according to a Financial Times analysis of phone-tracking movements published by Google. Economists say the shift has become the new normal.

‘Clunky’ Bidenomics proves a tough sell Under the Democrats’ watch, the US economic recovery has generated 10mn jobs and lowered unemployment to 3.5 per cent since January 2021. But months of unrelentingly high inflation have made “Bidenomics” a difficult sell on the campaign trail.

Travel

In the wilds of northern Iceland, Ineos billionaire Jim Ratcliffe is on a mission to save the Atlantic salmon. He is buying up rivers in a bid to protect the species — while also enjoying some of the world’s best fly-fishing.