Sajid Javid quit as the U.K.'s Chancellor of the Exchequer as Boris Johnson's first major Cabinet reshuffle went dramatically wrong.
The finance minister resigned after a face-to-face row with Mr. Johnson inside 10 Downing Street, according to three people familiar with the matter. After weeks of tension between the pair, the prime minister demanded that Mr. Javid fire all five of his most senior aides but the chancellor refused and quit.
Mr. Johnson's office named Mr. Javid's deputy Rishi Sunak as the new chancellor. The pound rallied while gilts fell, on speculation the U.K. may move toward more fiscal spending without Mr. Javid in charge of the Treasury.
Mr. Javid had served as Britain's finance minister since July. His departure throws the country's preparations for life outside the European Union into disarray, just four weeks before he was due to deliver a budget March 11.
Mr. Johnson had been planning a relatively simple overhaul of his top team, and wanted to keep Mr. Javid in his job. But the premier gambled on a move to take total control over the Treasury, a plan that backfired when Mr. Javid refused Mr. Johnson's ultimatum and resigned.
Mr. Javid was in the job for less than seven months, making him the shortest-serving chancellor for 50 years. Iain Macleod was appointed chancellor in Conservative Prime Minister Edward Heath's 1970 government but died a month later.
The relationship between prime minister and chancellor is the central one in most British governments. Margaret Thatcher's battles with her chancellors helped to hasten her end. Tony Blair's administration was torn apart by his fights with Gordon Brown, who in turn clashed with his chancellor, Alistair Darling. A rare exception was the close alliance between David Cameron and George Osborne.
