Five years ago Britain’s new finance minister Rishi Sunak wasn’t even a member of parliament, now he is running the world’s fifth largest economy.
The 39-year-old former Goldman Sachs banker was appointed in dramatic fashion on Thursday when incumbent Sajid Javid unexpectedly quit – in a row over advisers – during what Downing Street had cast as a routine ministerial reshuffle.
As Johnson moves to increase control of the finance ministry, one of the youngest chancellors in history will face a prime minister who wants to increase spending on everything from infrastructure and police to health and education.
“Delighted to be appointed, lots to get on with, thanks very much,” he told reporters before bounding up the steps into Britain’s finance ministry.
Sunak, who became a member of parliament for the governing Conservative Party in 2015, had been tipped for promotion on Thursday after a rapid ascent through the ranks of government.
But few expected the Brexit-supporting Oxford graduate to ascend to one of the highest offices in the land just yet.
Sunak had been serving as Javid’s deputy in the finance ministry – a job focused on keeping control of public spending – after Johnson promoted him from a junior ministerial role upon taking office in July 2019.
Despite his grip on the nation’s purse strings, Sunak has backed higher public spending, most recently speaking in support of multi-billion pound transport projects.
A research note by investment bank Citi saw the possibility of “Trump-style stimulus” with Javid gone and Sunak at the helm.
Sterling extended gains on Sunak’s appointment as investors bet that it would pave the way for a more expansionary budget next month.
SMOOTH AND LOYAL
Seen as a smooth media performer and loyal Conservative lawmaker, Sunak has often been deployed by the government to present and defend its policies in television interviews – a sign of trust from Johnson, who has a fraught relationship with Britain’s media.
Sunak takes control at a critical juncture for Britain’s $2.7 trillion economy. He will have to steer the economy through the turbulence of leaving the European Union and the forging of new trade links that will define Britain’s new relationship with the world.
However, the power struggle that forced his predecessor Javid to quit hints at a diminished role for what is usually the second most powerful position in government.
Johnson’s reshuffle sent a clear signal that he wants to centralise control and minimise dissent.
Based on his vocal support of Johnson’s plans to fund record levels of capital spending with increased borrowing over the next five years, it seems unlikely the two will clash over an election promise to end a decade of spending cuts.
“As Conservatives we believe you can’t tax your way to success. We believe in supporting free enterprise, ambition, entrepreneurship – that’s the way you pay for excellent public services,” he told the party’s annual conference last year
Sunak’s father was a doctor and his mother ran a chemist shop – two influences he regularly cites as evidence of an innate pro-business, pro-public services outlook.
“He’s a nice guy, but the fact that he was junior housing minister a few months ago and now holds one of the great offices of state must mean he has a steeliness about him too,” said a senior source at an international bank based in London
Married to the daughter of an Indian billionaire, co-founder of IT services company Infosys Narayana Murthy, Sunak represents a safe Conservative seat in northern England.
Before entering politics he worked for Goldman Sachs and a hedge fund, then co-founded an investment firm. He also has an MBA from Stanford University in the United States.
One former banking colleague said: “Rishi is very smart and humble. Great brain.”