Rishi Sunak dramatically seized the keys to Downing Street today after Penny Mordaunt followed Boris Johnson in dropping out of the leadership race. Mr Sunak has been named the new Tory chief – and the incoming PM – after his sole remaining rival Ms Mordaunt failed to make the threshold of 100 nominations needed to trigger a run-off.

To banging of desks in a room deep in the Commons, 1922 committee chair Sir Graham Brady said he had received one valid form. “Rishi Sunak is therefore elected as leader of the Conservative Party.”

He becomes the first British-Asian PM and first Hindu PM with Kenyan roots since His father was born in Kenya and his mother in Tanzania. They then migrated with their children to the UK. He will also be the richest Prime Minister with a net value of £730,000,000 as well as the youngest prime minister at 42 years since the Napoleonic Wars over 200 years ago.

The breakneck developments appear to have cooled the markets, in what is being branded a “dullness dividend”. Government borrowing costs have eased, the Pound has rallied, and expectations for interest rates are more than a percentage point lower than after the mini-Budget.

The new premier received a rapturous reception when he made a 10-minute private speech to MPs at Parliament at 2.30pm, giving the thumbs up to waiting journalists. He could be installed as PM by King Charles as early as tomorrow – or possibly even tonight.

He told his troops that Mr Johnson, Ms Mordaunt and Ms Truss were “all good Conservative colleagues and friends”, adding: “We’re united behind the policy and now cannot afford the indulgence of division over personality.

According to one MP present he said: “We have one chance. It is unite or die.”

It marks a spectacular political revival for Mr Sunak, just seven weeks after he was soundly defeated by Liz Truss in the struggle to succeed Mr Johnson. But after Ms Truss’s extraordinary 44-day implosion, he now faces one of the toughest in-trays for any PM with the public finances in chaos and the worst of the cost-of-living to come.

One of his first tasks will be to form a new Cabinet that can unite the warring party, with Jeremy Hunt set to continue as Chancellor – a week before he delivers a crucial Halloween Budget – and speculation that Ms Mordaunt could become Foreign Secretary.

Mr Sunak received public backing from over 190 Tory MPs – well over half the total – racking up more numbers as prominent supporters of Mr Johnson jumped on the bandwagon. They included senior figures such as James Cleverly, Brandon Lewis, Simon Clarke, Iain Duncan Smith, Priti Patel, and Nadhim Zahawi.

Mr Sunak will be the country’s first non-white premier, and at 42 the youngest since the Napoleonic Wars. Ms Mordaunt sounded defiance up until moments before the announcement, with allies claiming she had more than 90 supporters even though only 25 were publicly declared.

However, in a statement at 1.58pm Ms Mordaunt tweeted to admit she could not take the contest to the next phase. “Rishi has my full support,” she posted.

Former Tory leader Sir Iain Duncan Smith said the new leader had made it clear that getting the economy moving was “critical”. Asked if Mr Sunak had an “impossible task” leading a divided party, Sir Iain added: “I think today will have brought that to an end. It is not ungovernable, if it chooses to be.

“But looking at the response inside there today I think people are relieved, they want to get behind the PM and we have to do it. There is no other choice. So, I don’t think there is a need for an election, I don’t want one now, I want us to deliver on what we said we would do and then go to the polls at the normal time.”

However, other Johnsonites warned that he will need to call a snap election because he does not have a mandate, while the ex-PM himself suggested in his bombshell concession last night that he is only standing aside until the “right time”.

The Pound surged as markets processed the news that Mr Johnson will not fight for a return to Downing Street just seven weeks after he was ousted in a massive Tory coup. Mr Sunak hinted that Mr Johnson could be given a major foreign policy job saying he still has a contribution to make including “abroad”.

However, Keir Starmer renewed his demand for a general election slamming the “chaotic, ridiculous circus” at the top of the Tories, and goading Mr Johnson for failing to “get the numbers” to stand; 

Johnson loyalist Nadine Dorries warned that a general election was now inevitable as no other candidate has a mandate.

• The Daily Mail report