Liz Truss has appointed former foreign secretary Jeremy Hunt as the new Chancellor of the Exchequer.
It comes after Kwasi Kwarteng was sacked by Liz Truss as Chancellor on Friday amid growing concerns over his controversial mini-budget.
The choice of Mr Hunt, a prominent backer of her rival Rishi Sunak in the Tory leadership contest, will be seen as an attempt to restore stability after weeks of turmoil in the wake of the mini-budget.
While Chris Philp has been appointed Paymaster General, swapping jobs with Edward Argar who becomes Chief Secretary to the Treasury, Downing Street said.
Jeremy Hunt Dominic Lipinski
Earlier on Friday, Mr Kwarteng said he had accepted Ms Truss’ request he “stand aside” as Chancellor.
In a letter to the PM posted on his Twitter, Mr Kwarteng wrote: “Dear Prime Minster. You have asked me to stand aside as your Chancellor. I have accepted.
“When you asked me to serve as your Chancellor, I did so in full knowledge that the situation we faced was incredibly difficult, with rising global interest rates and energy prices. However, your vision of optimism, growth and change was right.
“As I have said many times in the past weeks, following the status quo was simply not an option. For too long this country has been dogged by low growth rates and high taxation — that must still change if this country is to succeed.
Mr Hunt's appointment comes after Liz Truss sacked Kwasi Kwarteng Stefan Rousseau
“The economic environment has changed rapidly since we set out the Growth Plan on 23 September. In response, together with the Bank of England and excellent officials at the Treasury we have responded to those events, and I commend my officials for their dedication.
“It is important now as we move forward to emphasise your government’s commitment to fiscal discipline. The Medium-Term Fiscal Plan is crucial to this end, and I look forward to supporting you and my successor to achieve that from the backbenches.
“We have been colleagues and friends for many years. In that time, I have seen your dedication and determination. I believe your vision is the right one. It has been an honour to serve as your first Chancellor.
“Your success is this country’s success and I wish you well."
While in a letter responding to Mr Kwarteng, Ms Truss wrote: “Thank you for your letter. As a long-standing friend and colleague, I am deeply sorry to lose you from the Government.
“We share the same vision for our country and the same firm conviction to go for growth.
“You have been Chancellor in extraordinarily challenging times in the face of severe global headwinds.
“The Energy Price Guarantee and the Energy Bill Relief scheme, which made up the largest part of the mini budget, will stand as one of the most significant fiscal interventions in modern times.
“Thanks to your intervention, families will be able to heat their homes this winter and thousands of jobs and livelihoods will be saved.
“You have cut taxes for working people by legislating this week to scrap the increase in National Insurance Contributions.
“You have set in train an ambitious set of supply side reforms that this Government will proudly take forward. These include new investment zones to unleash the potential of parts of our country that have been held back for too long and the removal of EU regulations to help British businesses succeed in the global economy.
“I deeply respect the decision you have taken today. You have put the national interest first.
“I know that you will continue to support the mission that we share to deliver a low tax, high wage, high growth economy that can transform the prosperity of our country for generations to come.
“Thank you for your service to this country and your huge friendship and support. I have no doubt you will continue to make a major contribution to public life in the years ahead.”