Rishi Sunak brings Dominic Raab and Suella Braverman back into the Cabinet

The new Prime Minister culled nearly a dozen of Ms Truss’s top-tier ministers on Tuesday before reviving the frontbench careers of the pair who were forced out under Ms Truss.

Mr Sunak kept Jeremy Hunt as Chancellor after the Conservative leader warned the UK is facing a “profound economic crisis” in his first speech since being appointed by the King.

Mr Hunt, brought in by Ms Truss to rescue the economy after her disastrous mini-budget, warned “it is going to be tough” ahead of his Halloween financial statement.

Boris Johnson loyalists who stayed close to Ms Truss, including Jacob Rees-Mogg, were among the 11 ministers who were out of government.

Mr Raab was rewarded with Deputy Prime Minister and Justice Secretary, roles he held under Mr Johnson before being sacked by Ms Truss for his support of Mr Sunak.

Grant Shapps was demoted to Business Secretary to allow Ms Braverman’s return as Home Secretary less than a week after she launched an attack on Ms Truss when she was forced out of the role over a breach of the Ministerial Code.

Penny Mordaunt came out of the reshuffle as Commons Leader, failing to win a promotion after she challenged Mr Sunak in the Tory leadership race, which he won without a vote being cast.

Allies of Mr Sunak benefited, with Mel Stride appointed Work and Pensions Secretary and Oliver Dowden becoming Chancellor of the Duchy of Lancaster having resigned as party chairman after a disastrous double by-election loss under Mr Johnson.

Therese Coffey, one of Ms Truss’s closest friends in Westminster, was demoted from deputy PM and health secretary to become Environment Secretary.

James Cleverly was kept on as Foreign Secretary and Ben Wallace as Defence Secretary, showing Mr Sunak was not entirely breaking with the past two administrations.

Simon Hart was brought in as Chief Whip to restore party discipline, with Mr Sunak having warned the party: “Unite or die.”

Simon Clarke and Kit Malthouse followed Mr Rees-Mogg out of the Cabinet as close allies of Mr Johnson who stayed close to Ms Truss.

Tory chairman Sir Jake Berry, a champion of Mr Johnson’s levelling up agenda, and chief whip Wendy Morton also departed.

More than an hour after Ms Truss defended her economic strategy in her farewell speech from Downing Street on Tuesday morning, Mr Sunak stood outside No 10 criticising her brief tenure.

Mr Sunak said his predecessor, whose 49 days in office made her the shortest-lasting PM in history, was “not wrong” to want to drive up growth, describing it as a “noble aim”.

“But some mistakes were made. Not born of ill will or bad intentions – quite the opposite in fact. But mistakes nonetheless,” he added.

“I’ve been elected as leader of my party and your Prime Minister in part to fix them – and that work begins immediately.”

The cost of Government borrowing dropped and the pound soared to the highest level since before Ms Truss’s disastrous mini-budget.

Mr Sunak, 42, became the UK’s first Hindu PM, the first of Asian heritage and the youngest for more than 200 years when he was appointed by Charles at Buckingham Palace.

Ms Truss had used her valedictory speech to stress the need to be “bold” as she defended her tax-cutting ideals despite being forced to reverse most of her policies.

She made no apologies for her mini-budget and stressed the need for lower taxes, before wishing Mr Sunak “every success, for the good of our country”.

After Mr Sunak was pictured shaking the King’s hand during a formal handover of power in which the monarch was “graciously pleased to accept” Ms Truss’s resignation, he sought to explain why he was now Prime Minister.

“Right now our country is facing a profound economic crisis,” he warned, blaming the lingering aftermath of the coronavirus pandemic and Vladimir Putin’s destabilising war in Ukraine.

He vowed to place “economic stability and confidence at the heart of this Government’s agenda”, after the financial chaos triggered by Ms Truss.

“This will mean difficult decisions to come,” he said, but he promised to repeat the “compassion” he showed during the coronavirus pandemic.

Mr Sunak vowed not to leave future generations “with a debt to settle that we were too weak to pay ourselves”.

He entered Downing Street after winning the swift Conservative leadership contest on Monday, with rivals Mr Johnson and Ms Mordaunt pulling their campaigns before a single vote was cast.

Mr Johnson, who had plotted a comeback less than two months after he resigned following a series of scandals, offered his “congratulations” to Mr Sunak just after his speech ended.

He welcomed the “historic day” and said “this is the moment for every Conservative to give our new PM their full and wholehearted support”.

As he became the third prime minister based on the mandate won by Mr Johnson in the 2019 general election, Mr Sunak vowed to deliver on that manifesto’s promises.

“All I can say is that I am not daunted. I know the high office I have accepted and I hope to live up to its demands,” he said, having ruled out a general election in talks with MPs.