Rishi Sunak officially became the UK’s 57th prime minister after meeting King Charles III on Tuesday.
Sunak, 42, is the country's first British Asian premier.
The monarch formally asked the new Tory leader to form the new government at the Buckingham palace.
Sunak, the former Treasury chief, won the Conservative party's leadership race after rival Penny Mordaunt dropped out minutes before the candidacy deadline.
After accepting the duty to form a government, Sunak said the UK is “facing a profound economic crisis.”
“The aftermath of COVID still lingers, Putin's war in Ukraine has destabilized energy markets and supply chains the world over,” Sunak said at Downing Street.
Paying tributes to his predecessor Liz Truss, Sunak said “some mistakes were made – not born of ill will, or bad intentions.”
“I have been elected as leader of my party and your prime minister in part to fix them.”
“I will place economic stability and confidence at the heart of this government's agenda,” Sunak added.
He said: “This will mean difficult decisions to come. But you saw me during COVID, doing everything I could to protect people and businesses with schemes like furlough.
“There are always limits. more so now than ever. But I promise you this: I will bring that same compassion to the challenges we face today.”
Speaking directly to British people, Sunak said his government will not leave a debt to their children and grandchildren.
“I will unite our country not with words, but with action,” he said, adding: “I will work day in and day out to deliver for you.”
Sunak said: “This government will have integrity, professionalism, and accountability at every level. Trust is earned, I will earn yours.”
Also paying tributes to former Prime Minister Boris Johnson, Sunak said he would deliver on 2019 manifesto pledges.
“I fully appreciate how hard things are. And I understand too that I have work to do to restore trust. After all that has happened.”
“I stand here before you ready to lead our country into the future, to put your needs above politics to reach out and a government that represents the very best traditions of my party,” Sunak added.
“Together we can achieve incredible things. We will create a future worthy of the sacrifices so many have made and fill tomorrow and every day thereafter with hope.”
The Tory leadership contest was triggered last Thursday after Truss was forced to resign following a tumultuous run in 10 Downing Street for 44 days.
Sunak is the fifth prime minister since the 2016 Brexit referendum, and the third one in the past 3.5 months.