Liz Truss insisted they “expect brighter days” for the country as she delivered her final speech before leaving number 10.
Speaking outside Downing Street, Mrs Truss, who became the UK’s lowest prime minister after just seven weeks, wished Rishi Sunak “every success” as she takes the reins.
But he seemed to double down on his political philosophy, saying that “Brexit freedoms” should allow for lower taxes and adding: “We simply cannot afford to be a low-growth country.”
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“I am more convinced than ever that we have to be bold and face the challenges we face,” she said.
“As the Roman philosopher Seneca wrote, it is not because things are difficult that we do not dare, it is because we do not dare that they are difficult”.
Mrs. Truss went to Buckingham Palace to officially offer her resignation to the king.
Shortly before 11:00, the royal house confirmed that the event had taken place and that King Charles was “graciously pleased to accept”.
The new Conservative Party leader, Mr. Sunak, then met with the king and was asked to form a new government.
In her speech, Ms. Truss said her brief administration had “acted urgently and decisively on the side of hard-working households and businesses” by reversing the rise in national insurance and introducing aid with energy bills during the winter.
But there was no apology after the economic chaos of the past few weeks following its tax-cutting mini-budget that ultimately led to its downfall.
Instead, he said he planned to stay in politics, “spending more time in my constituency and continuing to serve South West Norfolk from the benches,” before echoing the speech he made upon entering Downing Street.
“Our country continues to fight a storm, but I believe in Britain,” he said. “I believe in the British people and I know we have brighter days ahead of us.”
Ms. Truss won the keys to number 10 in early September after a summer leadership contest to replace Boris Johnson.
He beat Sunak with 57% of the party members’ votes and promised them he would “deliver, deliver, deliver”.
The start of her premiership was dominated by the Queen’s death, and she attended tribute events across the country to support the new king and gave a lecture at the funeral.
But his term in office was defined by the mini-budget which sent the markets into turmoil and the pound dropping.
Ms. Truss tried to regain her authority by firing her Chancellor Kwasi Kwarteng and replacing him with Jeremy Hunt, who had overturned almost all of her policies within days.
But after the resignation of his interior minister and chaos in parliament over a vote on fracking, he said he agreed that he could no longer remain in office.
Mr. Sunak was chosen to replace her by Tory MPs four days later.