Andy Burnham to become UK Prime Minister, Chancellor speculation intensifies

Andy Burnham will be moving in to Downing Street on Monday, as he becomes the next UK prime minister following the resignation of Sir Keir Starmer.

But who will live next door in Number 11 as chancellor?

Officially, Burnham's team says no decision has been taken and cabinet position announcements won't be made until Monday.

But that hasn't stopped speculation about who may take on the top Treasury role - and attempts at influencing Burnham's choice in chancellor.

Whoever it is, that person will face quite the in-tray – high debt, low growth, welfare reform, defence spending, and the economic fallout from the US-Israel war with Iran to name a few issues.

Here are the names of those believed to be in the running for the job - and what they could mean for your finances.

There has been increasing talk of the current home secretary becoming chancellor.

The BBC has been told there are "live discussions" about putting Mahmood into Number 11, while the Financial Times is reporting it as a certainty based on three sources close to Burnham.

While she does not have an economics background, she is a senior minister on Labour's right and it may be felt that she could reassure financial markets and smooth the transition to a Burnham government.

Kathleen Brooks, research director at XTB, said the markets were already rallying in relief to reports that Mahmood would become chancellor, with the pound up about 1% against the US dollar this week.

"It tells us two things about Andy Burnham's government: firstly, the market trusts Mahmood to take a sensible approach to economic policy, and to tackle the hard questions of welfare spending, secondly, Burnham is willing to have those to the right of the Labour party in his cabinet in key economic roles," Brooks said.

However, according to separate reports from the Press Association, Mahmood is keen to remain as home secretary and see through changes she has brought in to the asylum system.

The idea of Mahmood as chancellor is causing upset on the left of the party, according to The Times. The paper said those people would much prefer Ed Miliband in the role.

In late June, he was the bookmakers' strong favourite for the number two job in British politics, with the former Labour party leader politically closer to Burnham than other rivals.

However, opinions differ on whether former Treasury adviser Miliband would receive the backing of the financial markets, which the government depends on to lend money.

Some see Miliband as an inflation risk, believing his drive for net zero as energy secretary as partly responsible for the UK's high energy prices compared to other countries.

Analysts say that reputation, whether accurate or not, could affect how bond markets react to his time as chancellor.

In recent days, several MPs close to Burnham - who have no issues with the energy secretary - believe the likelihood of appointing Miliband has significantly lessened.

But others close to Miliband believe it was both highly possible he would become chancellor, and something that was still wanted.

Wes Streeting, a former contender for the Labour leadership, was the early favourite for chancellor, with suggestions that he could be awarded the job for coming out and backing Burnham and withdrawing his own ambitions.

However, economist and cross-bench peer Lord Jim O'Neill, who has been providing advice to Burnham, has warned against this approach.

Lord O'Neill told the BBC the advice he has given Burnham is to "figure out what his priorities are as prime minister before he picks a chancellor".

Though Burnham may appreciate Streeting's backing, the pair's politics differ - with Burnham seen to be inclined to spend more than Streeting.

Simon French, chief economist at consultancy Panmure Liberum, says Streeting is a "relatively market-friendly option" because of his pro-growth comments, but also a political risk because he might someday want to be prime minister.

Though seen as a less likely option than Streeting or Miliband, some view Pat McFadden as the most qualified pick, having held shadow Treasury jobs, been a business minister in a previous Labour government, and also being the current work and pensions secretary.

It is his experience in the latter role that could help him to tackle what many say will be any future chancellor's biggest task: welfare reform.

Panmure Liberum's French believes the markets may view McFadden as "the safest pair of hands" out of those in the running and will either react positively or neutrally if he were picked.

But if Burnham is looking for a clean break from the previous government, he will likely overlook the Sir Keir-loyalist.

Then there are the longlist of wildcards.

Former defence secretary John Healey, who very publicly quit because he did not believe the government was spending enough on defence, is another option.

However, Paul Johnson says Burnham would essentially be committing to meeting that spending demand if he chose him.

"If I was Andy Burnham, I would not want to tie myself to that particular pillar that quickly," he said.

Bookmakers and reports also mention chief secretary to the prime minister Darren Jones, who ruled himself out of the running for the leadership, and former chief executive of the Resolution Foundation Torsten Bell as outsiders.

While some politicians are more likely to be hired than others, each one will want the job.

As Lord O'Neill puts it: "The ones whose names are in the papers are the ones who are putting themselves forward."