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Rishi Sunak will become the UK’s next prime minister after Conservative leadership rival Penny Mordaunt dropped out of the race at the last minute.

The former chancellor was selected by MPs to succeed Liz Truss as Tory leader and will enter Downing Street less than two months after he lost the last race.

The extraordinary turn of events means he will be the UK’s third prime minister in seven weeks, after Ms Truss resigned just 44 days into her premiership.

Rishi Sunak wins race to be prime minister – live updates

Mr Sunak’s comeback represents a number of symbolic milestones: He will be the UK’s first Hindu prime minister, the first of Asian heritage, and the youngest for more than 200 years at the age of 42.

Ms Mordaunt bowed out of the leadership race at the eleventh hour on Monday after failing to get the 100 nominations from Tory MPs required by the 2pm deadline.

Sources in the Mordaunt camp said she got 90 nominations, though the number of those who publicly announced their backing of her fell far short of this.

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Ms Mordaunt conceded seconds before the results were due to be announced.

“These are unprecedented times. Despite the compressed timetable for the leadership contest it is clear that colleagues feel we need certainty,” she said in a tweet.

“They have taken this decision in good faith for the sake of the country.”

She added: “We all owe it to the country to each other and to Rishi to unite and work together for the good of the nation.

“There is much work to be done”.

Her decision came after Boris Johnson also withdrew from the contest on Sunday evening, despite claiming he had the backing of at least the 100 MPs required to make it on to the ballot.

It means Mr Sunak will enter No 10 unopposed and avoid an online ballot of the Conservative members that rejected him for Ms Truss last month.

Announcing the results of the leadership race, Sir Graham Brady, chairman of the powerful 1922 committee, said the Conservative Party only received one “valid” nomination to be the leader, and that was Mr Sunak.

Several senior Tories have congratulated the Richmond MP and called on the party to unite around him, but opposition parties have reiterated their calls for an immediate general election.

‘No mandate to lead’

Deputy Labour leader Angela Rayner said: “Rishi Sunak has no mandate and no idea what working people need.

“We need a general election so the public get a say on the future of Britain – and the chance for a fresh start with Labour.”

Mr Sunak will not officially become prime minister until Ms Truss formally tenders her resignation with King Charles, when he will be invited to form a government.

He hit the ground running by addressing Conservative MPs behind closed doors in the House of Commons half an hour after his victory was announced.

Shortly afterwards, he arrived at Conservative Campaign Headquarters in Westminster to cheers from Tory MPs gathered on the steps of the building, waiting to greet him.

Mr Sunak now has the daunting task of leading the nation through an economic crisis exacerbated by the chaotic legacy of Ms Truss, who was ousted after only six weeks in office.

The former foreign secretary won the last leadership race on a mandate to slash taxes to spark economic growth, but she was forced to row back on almost all of her economic policies after her mini-budget sent the markets into financial turmoil and the pound crashing.

Mr Sunak had warned Ms Truss against her plans, calling her tax cuts “immoral” and “fantasy economics”.

He also has to appoint a new cabinet on the backdrop of widening divisions within the Conservative Party as he attempts to pull the economy back together and boost support for the party.

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Stock markets slump for second day running after Trump announces tariffs – in worst day for indexes since COVID

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Stock markets slump for second day running after Trump announces tariffs - in worst day for indexes since COVID

Worldwide stock markets have plummeted for the second day running as the fallout from Donald Trump’s global tariffs continues.

While European and Asian markets suffered notable falls, American indexes were the worst hit, with Wall Street closing to a sea of red on Friday following Thursday’s rout – the worst day in US markets since the COVID-19 pandemic.

As it happened: Worst week’s trading in five years

All three of the US’s major indexes were down by more than 5% at market close; The Dow Jones Industrial Average plummeted 5.5%, the S&P 500 was 5.97% lower, and the Nasdaq Composite slipped 5.82%.

The Nasdaq was also 22% below its record-high set in December, which indicates a bear market.

Read more: What’s a bear market?

Ever since the US president announced the tariffs on Wednesday evening, analysts estimate that around $4.9trn (£3.8trn) has been wiped off the value of the global stock market.

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Mr Trump has remained unapologetic as the markets struggle, posting in all-caps on Truth Social before the markets closed that “only the weak will fail”.

The UK’s leading stock market, the FTSE 100, also suffered its worst daily drop in more than five years, closing 4.95% down, a level not seen since March 2020.

And the Japanese exchange Nikkei 225 dropped by 2.75% at end of trading, down 20% from its recent peak in July last year.

Pic: Reuters
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US indexes had the worst day of trading since the COVID-19 pandemic. Pic: Reuters

Trump holds trade deal talks – reports

It comes as a source told CNN that Mr Trump has been in discussions with Vietnamese, Indian and Israeli representatives to negotiate bespoke trade deals that could alleviate proposed tariffs on those countries before a deadline next week.

The source told the US broadcaster the talks were being held in advance of the reciprocal levies going into effect next week.

Vietnam faced one of the highest reciprocal tariffs announced by the US president this week, with 46% rates on imports. Israeli imports face a 17% rate, and Indian goods will be subject to 26% tariffs.

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Do Trump’s tariffs add up?

Read more:
Markets gave Trump a clear no-confidence vote
There were no winners from Trump’s tariff gameshow

China – hit with 34% tariffs on imported goods – has also announced it will issue its own levy of the same rate on US imports.

Mr Trump said China “played it wrong” and “panicked – the one thing they cannot afford to do” in another all-caps Truth Social post earlier on Friday.

Later, on Air Force One, the US president told reporters that “the beauty” of the tariffs is that they allow for negotiations, referencing talks with Chinese company ByteDance on the sale of social media app TikTok.

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Tariffs: Xi hits back at Trump

He said: “We have a situation with TikTok where China will probably say, ‘We’ll approve a deal, but will you do something on the tariffs?’

“The tariffs give us great power to negotiate. They always have.”

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Financial markets were always going to respond to Trump tariffs but they’re also battling with another problem

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Financial markets were always going to respond to Trump tariffs but they're also battling with another problem

Global financial markets gave a clear vote of no-confidence in President Trump’s economic policy.

The damage it will do is obvious: costs for companies will rise, hitting their earnings.

The consequences will ripple throughout the global economy, with economists now raising their expectations for a recession, not only in the US, but across the world.

Tariffs latest: FTSE 100 suffers biggest daily drop since COVID

Financial investors had been gradually re-calibrating their expectations of Donald Trump over the past few months.

Hopes that his actions may not match his rhetoric were dashed on Wednesday as he imposed sweeping tariffs on the US’ trading partners, ratcheting up protectionism to a level not seen in more than a century.

Markets were always going to respond to that but they are also battling with another problem: the lack of certainty when it comes to Trump.

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He is a capricious figure and we can only guess his next move. Will he row back? How far is he willing to negotiate and offer concessions?

Read more:
There were no winners from Trump’s tariff gameshow
Trade war sparks ‘$2.2trn’ global market sell-off

These are massive unknowns, which are piled on to uncertainty about how countries will respond.

China has already retaliated and Europe has indicated it will go further.

That will compound the problems for the global economy and undoubtedly send shivers through the markets.

Much is yet to be determined, but if there’s one thing markets hate, it’s uncertainty.

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Court confirms sacking of South Korean president who declared martial law

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Court confirms sacking of South Korean president who declared martial law

South Korea’s constitutional court has confirmed the dismissal of President Yoon Suk Yeol, who was impeached in December after declaring martial law.

His decision to send troops onto the streets led to the country’s worst political crisis in decades.

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”.

Demonstrators who stayed overnight near the constitutional court wait for the start of a rally calling for the president to step down. Pic: AP
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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.

Read more from Sky News:
Highs and lows of Five-Year Keir
MP tells Sky News she was targeted online by Tate brothers

More on South Korea

The Constitutional Court is under heavy police security guard ahead of the announcement of the impeachment trial. Pic: AP
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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.

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