The second Tory leadership race in just three months is underway following the extraordinary resignation of Liz Truss.
The now-outgoing PM was forced from office after just 44 days following a seismic few weeks in Westminster that saw her tax-slashing mini-budget crash and burn.
Ms Truss’s resignation, signalling the end of the shortest term by any prime minister in modern British history, followed a raft of humiliating U-turns, the loss of two of her most senior Cabinet ministers and an open revolt by Tory MPs.
All eyes are now on who could replace her – with speculation mounting that Boris Johnson could launch a spectacular comeback to frontline politics, just six weeks after he was officially ousted from the top job.
Party rules for the new leadership contest mean PM hopefuls would need the backing of at least 100 Tory MPs by Monday afternoon to face off against any other successful challenger in a vote of the membership.
This will rule out a number of candidates from running and means the maximum number of people able to stand is three.
Sir Graham Brady, chairman of the powerful 1922 backbench committee, said: “We fixed a high threshold but a threshold that should be achievable by any serious candidate who has a prospect of going through.”
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Image: Liz Truss announces her resignation
Who are the runners and riders?
Tory MPs are scrambling to find a replacement who can unite the party and turn around its fortunes after a series of dire polls predicted electoral wipe out.
Sky’s deputy political editor Sam Coatessays former chancellor and Tory leadership finalist Rishi Sunak has signalled he is “very, very up for the job”.
And Suella Braverman – who resigned as home secretary on Wednesday– was highly critical of Ms Truss when she stepped down, in a move that allies believe shows she is also keen to step up to the plate.
Coates says: “The question now is who will stand aside and who will survive in an intense, week-long leadership contest.”
Image: How the Tory Party changes its leader
Nominations opened on Thursday and will close at 2pm on Monday – with a new leader to be chosen by Friday 28 October.
The final two candidates will take part in a hustings event organised with news broadcasters, before an online vote for members to choose who they want to lead the party.
However, we could have a new leader sooner than that.
One potential option is that MPs coalesce around one candidate, meaning the contest will be over on Monday if only one person is able to receive enough nominations.
‘Bring back Boris’
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Former culture secretary Nadine Dorries backs Johnson
On Thursday night, momentum appeared to be swinging behind Boris Johnson amid reports he will throw his hat in the ring.
Former culture secretary Nadine Dorries, a staunch Johnson ally, told Sky News she is confident he will meet the 100 MPs threshold.
“There is only one MP who has the mandate of the British public, who won a general election only three years ago with an 80-seat majority, and that was Boris Johnson,” Ms Dorries said.
“He is a known winner and that is certainly who I’m putting my name against because I want us to win the general election. Having a winner in place is what the party needs to survive.”
While multiple Tory MPs have expressed their support for a Johnson comeback, any attempt to return to frontline politics is proving divisive.
Senior backbencher Sir Roger Gale MP tweeted to remind people that the ex-prime minister, who resigned in a mire of sleaze, was still under investigation by the Privileges Committee for potentially misleading the House over partygate.
If found guilty, Mr Johnson could face recall proceedings that would leave him battling for his seat in the Commons if he receives a suspension of 10 days or more.
Sir Roger told Times Radio that, if Mr Johnson is voted back in as PM, he would resign from the Conservative party whip and stand as an independent.
Polling for the Conservatives was already dropping during Mr Johnson’s premiership as it became beset with scandals, including the ex-PM breaking his own lockdown laws.
The final straw was questions about his judgment over Chris Pincher, the then-Tory whip who was the centre of drunken groping allegations. That came on top of Mr Johnson’s attempts to change the rules to prevent the suspension of then-Conservative MP Owen Paterson after he broke lobbying rules.
Ms Truss officially took over from Mr Johnson on 6 September, with members favouring her tax-slashing plan for growth over Mr Sunak’s more conservative fiscal policies.
But just two weeks into the job, her disastrous mini-budget sparked chaos in the financial markets, leading to the sacking of chancellor Kwasi Kwarteng and a humiliating abandonment of the very economic policies that brought her into office.
Many MPs have voiced their support for Mr Sunak – who had warned Ms Truss that her economic policies were “immoral” and campaigned for fiscal responsibility during the last leadership race.
Jonathan Djanogly and Mark Garnier both tweeted their support for him late on Thursday night.
Richard Holden MP said that in the “difficult economic times, the party and the country needs a PM who has got the economic experience to deliver real stability over the next few years and get the ship of state back on an even keel – and that person is Mr Sunak”.
‘Last chance saloon’
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10:56
Labour leader Keir Starmer has spoken to Beth Rigby about Liz Truss’s resignation,
A vicious leadership contest would further divide an already split party which is about to see its third prime minister in the space of a few months – and many Tory MPs are calling for colleagues to unite behind the next leader, whoever that may be.
Justin Tomlinson said the leadership contest is the “last-chance saloon” for the party to maintain credibility, while former cabinet minister Robert Jenrick, warned the Tories face “extinction…if we get this wrong”.
Labour leader Sir Keir Starmer said the Conservative Party has “shown it no longer has a mandate to govern”, adding that British people “deserve so much better than this revolving door of chaos”.
The court ruled to uphold the impeachment saying the conservative leader “violated his duty as commander-in-chief by mobilising troops” when he declared martial law.
The president was also said to have taken actions “beyond the powers provided in the constitution”.
Image: Demonstrators stayed overnight near the constitutional court. Pic: AP
Supporters and opponents of the president gathered in their thousands in central Seoul as they awaited the ruling.
The 64-year-old shocked MPs, the public and international allies in early December when he declared martial law, meaning all existing laws regarding civilians were suspended in place of military law.
Image: The court was under heavy police security guard ahead of the announcement. Pic: AP
After suddenly declaring martial law, Mr Yoon sent hundreds of soldiers and police officers to the National Assembly.
He has argued that he sought to maintain order, but some senior military and police officers sent there have told hearings and investigators that Mr Yoon ordered them to drag out politicians to prevent an assembly vote on his decree.
His presidential powers were suspended when the opposition-dominated assembly voted to impeach him on 14 December, accusing him of rebellion.
The unanimous verdict to uphold parliament’s impeachment and remove Mr Yoon from office required the support of at least six of the court’s eight justices.
South Korea must hold a national election within two months to find a new leader.
Lee Jae-myung, leader of the main liberal opposition Democratic Party, is the early favourite to become the country’s next president, according to surveys.
While the UK’s FTSE 100 closed down 1.55% and the continent’s STOXX Europe 600 index was down 2.67% as of 5.30pm, it was American traders who were hit the most.
All three of the US’s major markets opened to sharp losses on Thursday morning.
Image: The S&P 500 is set for its worst day of trading since the COVID-19 pandemic. File pic: AP
By 8.30pm UK time (3.30pm EST), The Dow Jones Industrial Average was down 3.7%, the S&P 500 opened with a drop of 4.4%, and the Nasdaq composite was down 5.6%.
Compared to their values when Donald Trump was inaugurated, the three markets were down around 5.6%, 8.7% and 14.4%, respectively, according to LSEG.
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Worst one-day losses since COVID
As Wall Street trading ended at 9pm in the UK, two indexes had suffered their worst one-day losses since the COVID-19 pandemic.
The S&P 500 fell 4.85%, the Nasdaq dropped 6%, and the Dow Jones fell 4%.
It marks Nasdaq’s biggest daily percentage drop since March 2020 at the start of COVID, and the largest drop for the Dow Jones since June 2020.
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5:07
The latest numbers on tariffs
‘Trust in President Trump’
White House press secretary Karoline Leavitt told CNN earlier in the day that Mr Trump was “doubling down on his proven economic formula from his first term”.
“To anyone on Wall Street this morning, I would say trust in President Trump,” she told the broadcaster, adding: “This is indeed a national emergency… and it’s about time we have a president who actually does something about it.”
Later, the US president told reporters as he left the White House that “I think it’s going very well,” adding: “The markets are going to boom, the stock is going to boom, the country is going to boom.”
He later said on Air Force One that the UK is “happy” with its tariff – the lowest possible levy of 10% – and added he would be open to negotiations if other countries “offer something phenomenal”.
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3:27
How is the world reacting to Trump’s tariffs?
Economist warns of ‘spiral of doom’
The turbulence in the markets from Mr Trump’s tariffs “just left everybody in shock”, Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions in Boston, told Reuters.
He added that the economy could go into recession as a result, saying that “a lot of the pain, will probably most acutely be felt in the US and that certainly would weigh on broader global growth as well”.
Meanwhile, chief investment officer at St James’s Place Justin Onuekwusi said that international retaliation is likely, even as “it’s clear countries will think about how to retaliate in a politically astute way”.
He warned: “Significant retaliation could lead to a tariff ‘spiral of doom’ that could be the growth shock that drags us into recession.”
It comes as the UK government published a long list of US products that could be subject to reciprocal tariffs – including golf clubs and golf balls.
Running to more than 400 pages, the list is part of a four-week-long consultation with British businesses and suggests whiskey, jeans, livestock, and chemical components.
Meanwhile, Prime Minister Sir Keir Starmer said on Thursday that the US president had launched a “new era” for global trade and that the UK will respond with “cool and calm heads”.
It also comes as Canadian Prime Minister Mark Carney announced a 25% tariff on all American-imported vehicles that are not compliant with the US-Mexico-Canada trade deal.
He added: “The 80-year period when the United States embraced the mantle of global economic leadership, when it forged alliances rooted in trust and mutual respect and championed the free and open exchange of goods and services, is over. This is a tragedy.”
Donald Trump has announced a 10% trade tariff on all imports from the UK – as he unleashed sweeping tariffs across the globe.
Speaking at a White House event entitled “Make America Wealthy Again”, the president held up a chart detailing the worst offenders – which also showed the new tariffs the US would be imposing.
“This is Liberation Day,” he told a cheering audience of supporters, while hitting out at foreign “cheaters”.
He claimed “trillions” of dollars from the “reciprocal” levies he was imposing on others’ trade barriers would provide relief for the US taxpayer and restore US jobs and factories.
Mr Trump said the US has been “looted, pillaged, raped, plundered” by other nations.
Image: Pic: AP
His first tariff announcement was a 25% duty on all car imports from midnight – 5am on Thursday, UK time.
Mr Trump confirmed the European Union would face a 20% reciprocal tariff on all other imports. China’s rate was set at 34%.
The UK’s rate of 10% was perhaps a shot across the bows over the country’s 20% VAT rate, though the president’s board suggested a 10% tariff imbalance between the two nations.
It was also confirmed that further US tariffs were planned on some individual sectors including semiconductors, pharmaceuticals and critical mineral imports.
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6:39
Trump’s tariffs explained
The ramping up of duties promises to be painful for the global economy. Tariffs on steel and aluminium are already in effect.
The UK government signalled there would be no immediate retaliation.
Business and Trade Secretary Jonathan Reynolds said: “We will always act in the best interests of UK businesses and consumers. That’s why, throughout the last few weeks, the government has been fully focused on negotiating an economic deal with the United States that strengthens our existing fair and balanced trading relationship.
“The US is our closest ally, so our approach is to remain calm and committed to doing this deal, which we hope will mitigate the impact of what has been announced today.
“We have a range of tools at our disposal and we will not hesitate to act. We will continue to engage with UK businesses including on their assessment of the impact of any further steps we take.
“Nobody wants a trade war and our intention remains to secure a deal. But nothing is off the table and the government will do everything necessary to defend the UK’s national interest.”
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0:43
Who showed up for Trump’s tariff address?
The EU has pledged to retaliate, which is a problem for Northern Ireland.
Should that scenario play out, the region faces the prospect of rising prices because all its imports are tied to EU rules under post-Brexit trading arrangements.
It means US goods shipped to Northern Ireland would be subject to the EU’s reprisals.
The impact of a trade war would be expected to be widely negative, with tit-for-tat tariffs risking job losses, a ramping up of prices and cooling of global trade.
Research for the Institute for Public Policy Research has suggested more than 25,000 direct jobs in the UK car manufacturing industry alone could be at risk from the tariffs on car exports to the US.
The Society of Motor Manufacturers and Traders (SMMT) had said the tariff costs could not be absorbed by manufacturers and may lead to a review of output.
The tariffs now on UK exports pose a big risk to growth and the so-called headroom Chancellor Rachel Reeves was forced to restore to the public finances at the spring statement, risking further spending cuts or tax rises ahead to meet her fiscal rules.
A member of the Office for Budget Responsibility (OBR), David Miles, told MPs on Tuesday that US tariffs at 20% or 25% maintained on the UK for five years would “knock out all the headroom the government currently has”.
But he added that a “very limited tariff war” that the UK stays out of could be “mildly positive”.
He said: “There’s a bit of trade that will get diverted to the UK, and some of the exports from China, for example, that would have gone to the US, they’ll be looking for a home for them in the rest of the world.
“And stuff would be available in the UK a bit cheaper than otherwise would have been. So there is one, not central scenario at all, which is very, very mildly potentially positive to the UK. All the other ones which involve the UK facing tariffs are negative, and they’re negative to very different extents.”