Andy Burnham is due in Downing Street on Monday, and the search for his next chancellor is already drawing market attention and political pushback.
Andy Burnham is due to move into Downing Street on Monday, and the chancellor race is already shaping up to be one of the first big tests of his new government. Burnham becomes the next UK prime minister after Sir Keir Starmer’s resignation, but his team says no cabinet decisions have been made and official announcements will wait until Monday.
That has not stopped intense speculation over who will get the Treasury job and who will be asked to manage the country’s finances from Number 11. The next chancellor will inherit a difficult brief, with high debt, weak growth, welfare reform, defence spending pressures and the economic impact of the US-Israel war with Iran all waiting on the desk.
The name drawing the most attention is Home Secretary Shabana Mahmood. The BBC has been told there are live discussions about appointing her, while the Financial Times has reported that her move to the Treasury is a certainty, citing three sources close to Burnham. Even though she has no economics background, she is seen as a senior figure on Labour’s right who could help calm financial markets during the transition.
Market reaction has already been part of the story. Kathleen Brooks, research director at XTB, said investors were responding positively to the reports and pointed to a rise of about 1% in the pound against the US dollar this week. But separate reporting from the Press Association says Mahmood would prefer to stay at the Home Office and continue work on asylum changes. The prospect of her being moved to the Treasury has also caused unease on Labour’s left, according to The Times, which said those MPs would rather see Ed Miliband in the role.
Miliband, once the bookmakers’ favorite for the post, remains another possible choice. He has years of government experience, but there are mixed views about how markets would react to him. Some analysts see him as an inflation risk because of his record as energy secretary and his support for net zero, while others in Burnham’s circle think his chances have fallen in recent days. Foreign Secretary Yvette Cooper is also being discussed as a compromise option, while Wes Streeting, Pat McFadden, Darren Jones and Torsten Bell are among the other names mentioned.
Burnham is also expected to replace current Chancellor Rachel Reeves, although a spokesperson said no decision has been taken. Reeves has urged Burnham to keep following her approach, saying it is starting to show results, and Burnham has previously said he would stick to her fiscal rules. For now, the chancellor race is still open, but the choice will say a lot about how Burnham wants to balance market confidence, party unity and his own economic priorities. The takeaway for readers is simple: whoever gets No. 11 will shape the money side of Burnham’s government from day one.
