(Bloomberg) – Boris Johnson has pulled out of the contest to lead the UK’s ruling Conservative Party, leaving Rishi Sunak on course to become the next prime minister.

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Johnson, who left office last month after a series of scandals rocked his post as prime minister, said returning to 10 Downing Street ‘just wouldn’t be the right thing to do’ because of the risks that it would divide the party.

“You cannot govern effectively unless you have a united party in Parliament,” Johnson wrote in a statement on Sunday. “The best thing I can do is not allow my nomination to go ahead.”

The decision leaves Sunak facing Commons Leader Penny Mordaunt in the contest, with the former Chancellor of the Exchequer having the public backing of key Tory MPs. Mordaunt remains in the running, a person familiar with the matter said after Johnson’s exit.

Whoever wins will be tasked with trying to bring unity to a party that has gone through months of upheaval and deadly infighting. Conservative support trails the Labor opposition far behind in the polls, as a sharp cut in the cost of living and soaring inflation cloud the economic outlook.

The pound extended its gains after Johnson said he would not run, rallying as much as 1.0% to $1.1401 in early Asian trade on expectations that a potential Prime Minister Sunak job would be better qualified to try to fix the nation’s finances.

Prime Minister Liz Truss’s decision to step down sparked competition, following weeks of turmoil with investors dumping the pound and UK government bonds. His economic plan, including a sharp increase in borrowing to pay for tax cuts, rattled markets and turned voter sentiment further against the Tories.

The story continues

The possibility that Johnson could return to office after leaving less than two months ago was the latest twist in the upheaval in British politics following the 2016 vote to leave the European Union.

Johnson cut short his vacation last week to consider running for his old post, rallying support from cabinet ministers including Business Secretary Jacob Rees-Mogg. Although he remains popular with Tory members, MPs are divided over his legacy and fear his return to power will rekindle all the scandals that bought him off.

Johnson insisted he had the support to proceed to a membership ballot, but said it could deepen divisions within the House party.

“I led our party to a massive election victory less than three years ago,” Johnson said. “There was a very good chance that I would succeed in the election with a member of the Conservative Party. But over the past few days, I’ve unfortunately come to the conclusion that it just wouldn’t be the right thing to do.

The Conservative Party has set a deadline of 2 p.m. Monday for leadership candidates to certify the support of at least 100 MPs each to stand for election. If there is more than one candidate running by the end of Monday, Conservative party members will have the final say in an online vote, the result of which is expected on Friday.

Johnson didn’t endorse anyone, saying he would back whoever wins. While Sunak has a commanding lead, there are certain scenarios where Mordaunt could become the conservative member’s favorite.

Sunak has at least 123 lawmakers behind him, compared to Boris Johnson’s 51 named backers, according to Bloomberg’s tally, which has just 23 for Mordaunt. She told Sky News she was confident in her support and that those supporting Johnson may move to her side.

In a short tweet, Sunak highlighted some of Johnson’s apparent accomplishments, including delivering Brexit and rolling out the Covid vaccine.

Sunak lost to Truss in the leadership battle to replace Johnson, with Conservative members worrying about his role in bringing down Johnson and his decision to raise taxes to the highest level since World War II. There is also unease about his personal wealth and his aggressive attacks on Truss during this contest.

Mordaunt served as Commerce Secretary before being promoted to leader of the House of Commons. Her star has risen steadily since joining in the final battle for leadership when Johnson stepped down. Her confident performance in the lower house and her optimistic outlook have sparked talk that she could help the Tories move past the Johnson-Sunak controversies.

In the contest that installed Truss as prime minister, Mordaunt placed second behind Sunak – and ahead of Truss – in every round of voting among her fellow MPs until the critical round. In July, a survey on the ConservativeHome website of party members ranked Mordaunt second to Defense Secretary Ben Wallace on who should be leader.

These factors may make Mordaunt reluctant to step down.

Growth and prosperity

In a column for the Telegraph newspaper, Mordaunt wrote that she would focus on lowering taxes and increasing productivity to “ensure growth and prosperity” across the country, a pitch similar to what Truss made. offers.

“I understand the challenges that families face and I know how difficult things are when household budgets are tight, the cost of living goes up and the public services just don’t seem to be there,” he said. writes Mordaunt.

But Tory leaders are concerned about the growing economic crisis that is beginning to engulf the UK. A closely watched survey due Monday morning is expected to show a deepening recession as inflation persists at its highest level in 40 years.

A soaring budget deficit has left current Chancellor Jeremy Hunt warning of tough decisions ahead. He is due to make a major statement on tax and Treasury spending plans on October 31, a date chosen to better inform the Bank of England of how quickly it is raising interest rates.

Read more:

• Mordaunt offers to lead the UK by showing the Tories what they missed

• Pound extends gain to 0.9% after Johnson pulls out of PM race

• UK can’t shake pound negativity after weeks of political chaos

• Whoever wins loses: Truss’ successor inherits Britain’s grim economy

(Updates with breed details.)

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