Britain will be hit harder after the June 23 vote to leave the European Union, the Commission forecast, predicting lower growth in 2016 and a possible recession next year.
David Cameron's last appearance in Parliament as British Prime Minister ended in a standing ovation after a bravura 36-minute performance that taunted his rivals, reflected on his legacy and confessed his love for the office cat, Larry.
"The prime minister explained that we would need some time to prepare for these negotiations and spoke of her hope that these could be conducted in a constructive and positive spirit".
The 59-year-old May became the heir apparent after Andrea Leadsom, the final of four opponents in the bid to lead the Conservative Party, dropped out following backlash to her remarks that she was more qualified than May to lead Britain because she is a mother. He replaces George Osborne, whose determination to balance Britain's books made him synonymous with austerity.
Former foreign secretary Philip Hammond was appointed the new chancellor, while former energy secretary was named the new home secretary.
Other prominent "Leave" campaigners were also rewarded.
Prime Minister David Cameron will be leaving 10 Downing St. - but another resident of the famous address won't be going anywhere.
May ran as a "safe pair of hands", meaning she could be trusted to handle her party's leadership during trying times, namely the economic instability wrought by the Brexit vote. But what counted more was that, under pressure, she had shown her unfitness for the job in several gaffes, embroidering her financial career and hinting that, as a mother, she was better qualified than the childless Mrs May. The former mayor of London is internationally famous - but for rumpled eccentricity and distinctly undiplomatic gaffes, rather than statesmanlike behavior.
But in the days and weeks since the Brexit vote the tables have been turned.
With his unkempt blonde hair, bumbling humour and penchant for Latin quotations, the man known to Britons simply as "Boris" will be the government's most colourful figure, but a controversial choice for conducting sensitive diplomacy with world leaders.
Russian President Vladimir Putin said he was ready for "constructive dialogue" with Britain's new leader.
May is Queen Elizabeth's 13th prime minister in a line that started with Winston Churchill.
Soon afterward the palace released a photo of May curtseying to the monarch at the palace. But The Sun said Cameron had been "undone by his Olympian overconfidence", while the Guardian called him a "prime minister of broken promises".
May must try to limit the damage to British trade and investment as she renegotiates the country's ties with its 27 European Union partners.
That triggered a process that may further complicate both the fiscal and the political situation in each country.
"We have so many other crises we're facing at the moment". The Government I lead will be driven not by the interests of the privileged few, but by yours. We will do everything we can to give you more control over your lives.
She said her party believed in the "precious, precious bond" between England, Scotland, Wales and Northern Ireland. "No one had a clue who I was until eventually someone said, 'Hey!"
A tough-talking home secretary for the past six years, May is something of an unknown quantity internationally, although she has received ringing endorsements from party colleagues and a normally sceptical British tabloid press.
Ms Rudd's time at the Climate Change department has often been a stormy one as when she piloted fracking legislation through the Commons as its junior minister she was accused by the opposition of reneging on pledges not to let the controversial gas extraction process occur in national parks by announcing that drilling would be allowed underneath such protected areas if it began outside their surface boundaries.
Flanked by his wife and three children, he wished Britain "continued success".