UPDATE 24 Oct: Rishi Sunak is likely to be named Britain’s new Prime Minister on Monday after Boris Johnson quit the race, admitting he is unlikely to unite the party.

Mr Johnson said he had cleared the 100-declarations threshold but this is far fewer than Mr Sunak and he felt that dropping out was the “right thing to do”. Leader of the House Penny Mordaunt is well short of the threshold.

Mr Sunak, the former Chancellor, who officially launched his campaign on Sunday morning, already had more than twice as many supporters as the former Prime Minister – 146 against Mr Johnson’s 61 and Ms Mordaunt’s 26. If successful, Mr Sunak would be Britain’s first non-white Prime Minister, and at 42 the youngest since the Napoleonic Wars.

The pound, which has taken a battering during the last few weeks of turmoil, was one the few currencies that did not lose ground to the US dollar overnight as political certainty set in.

Sterling was quoted at $1.1343 early Monday, sharply higher than $1.1203 at the London equities close on Friday amid expectations that the fiscal statement due on 31 October will not be delayed.

The FTSE 100, which tends to move inversely to sterling because most of its constituents make most of the earnings in dollars, edged back above 7,000 in early Monday trade but after an hour turned 25 points, or 0.4%, lower at 6,944.50.

Government borrowing costs fell as the interest rate on a 30-year UK Treasury gilt fell by nearly 0.2 percentage points to about 3.9%. 

Mel Stride, chair of the influential Treasury select committee, Guy Opperman, the former Pensions Minister, and Jesse Norman, the ex-Barclays director who served as Financial secretary to the Treasury during the pandemic, all came out in favour of Mr Sunak over the weekend.

Nadhim Zahawi wrote an article in the Sunday Telegraph backing Mr Johnson who made him his last Chancellor, but by Sunday night he had switched to supporting Mr Sunak and his article was no longer available online.

Ms Mordant now remains as the only challenger to Mr Sunak and she stated on Sunday that she was “in it to win it”.

But with her support well below that of the former Chancellor it is a lost cause and the likelihood is that she will concede before the official 2pm Monday deadline for nominations.

Angela Rayner, Labour’s deputy leader, said: “The Tories are about to hand Rishi Sunak the keys to the country without him saying a single word about how he would govern. No one voted for this.

“Perhaps it’s not surprising he’s avoiding scrutiny: after all, he was so bad that just a few weeks ago he was trounced by Liz Truss.

“All anyone knows about him is that he broke the law, he was rejected by his own party because he created a vicious cycle of low growth, he did nothing to tackle the cost-of-living crisis, that his family avoided paying tax in this country; and that he betrayed Boris Johnson to get his job.

“It’s why we need an election now – people deserve a vote on the future of the country.”

In his statement Mr Johnson said he felt “uniquely placed” to avoid the country being plunged into a disastrous general election, but he could not reach agreement with his leadership rivals “in the national interest”.

He said: “In the last few days I have been overwhelmed by the number of people who suggested that I should once again contest the Conservative Party leadership, both among the public and among friends and colleagues in Parliament.

“I have been attracted because I led our party into a massive election victory less than three years ago – and I believe I am therefore uniquely placed to avert a general election now.

“A general election would be a further disastrous distraction just when the government must focus on the economic pressures faced by families across the country.

“I believe I am well placed to deliver a Conservative victory in 2024 – and tonight I can confirm that I have cleared the very high hurdle of 102 nominations, including a proposer and a seconder, and I could put my nomination in tomorrow. There is a very good chance that I would be successful in the election with Conservative Party members – and that I could indeed be back in Downing Street on Friday.

“But in the course of the last days I have sadly come to the conclusion that this would simply not be the right thing to do. You can’t govern effectively unless you have a united party in parliament.

“And though I have reached out to both Rishi and Penny – because I hoped that we could come together in the national interest – we have sadly not been able to work out a way of doing this.

“Therefore I am afraid the best thing is that I do not allow my nomination to go forward and commit my support to whoever succeeds. I believe I have much to offer but I am afraid that this is simply not the right time.”

… more follows