Andy Burnham, Labour MP for Makerfield, celebrates after his swearing-in at the Houses of Parliament on June 22, 2026 in London, England.
Dan Kitwood | Getty Images
Andy Burnham is set to become the U.K.’s seventh prime minister in a decade on Monday, with investors and market watchers already questioning his policy agenda.
King Charles will formally ask Burnham to form a government at Buckingham Palace this morning ahead of his official appointment as prime minister.
After that, he is expected to make his first speech as premier and set out his vision for the country.
U.S. President Donald Trump has welcomed Burnham’s plan to fast-track oil and gas exploration in already-licensed fields in the North Sea.
Writing on Truth Social over the weekend, Trump called North Sea oil “invaluable,” adding it will take the U.K. from a “Poverty Stricken Disaster, to one of the Richest Countries anywhere in the World!”
Starmer announced last month that he would step down from his post, after a series of policy U-turns, scandals over staffing appointments and a dramatic loss in Britain’s local elections sparked calls for his resignation from within his own ranks.
Burnham had no opponents in the race to lead the governing Labour Party.
He returned to parliament just weeks ago, after winning a by-election in Makerfield, a constituency in the north of England. Only sitting members of parliament can run to lead the Labour Party.
Before his return to Westminster, Burnham – nicknamed Labour’s “King in the North” – served as the Mayor of Greater Manchester, one of the U.K.’s largest metropolitan areas. Prior to his near-decade mayoral tenure, he was a Labour MP and held cabinet positions under prime ministers Tony Blair and Gordon Brown.
“I am ready,” Burnham told supporters on Friday as he officially became the leader of the Labour Party.
The prospect of Burnham, considered more left-leaning than Starmer, replacing the incumbent prime minister sent jitters through bond markets earlier this year. Investors in U.K. government bonds, known as gilts, appeared to be largely supportive of Starmer and his finance minister, Rachel Reeves, remaining in their roles, due to their commitment to rein in public borrowing and spending.
In his speech on Friday, Burnham promised to fix the “big things” such as social care policy, and criticized changes that occurred in Britain over the past few decades after “political power was centralized and economic power was privatized”.
In a note last week, Rachel Vahey, head of public policy at AJ Bell, said that while much remained unclear about Burnham’s policy path, there “have been clues as to the direction Burnham will take when he assumes office.”
“Recent rumours that the autumn Budget could be expanded to include a departmental spending review suggest that whatever emerges from Burnham’s inaugural Budget could prove hugely significant,” she said. “It’s entirely possible this might mean a number of tax reforms and new policies affecting people’s finances.”
Vahey added that while Burnham waiting has committed to uphold Labour’s manifesto pledges, including not raising income tax, it does not rule out longer-term plans running against those promises.
“In the immediate term, there has been speculation that Burnham may consider reforming inheritance tax and council tax, as well as introducing ‘stronger public control’ of key services like energy, transport and water,” she noted.
Andrew Wishart, senior U.K. economist at Berenberg, told CNBC’s “Europe Early Edition” on Friday that the market now appeared “fairly relaxed about the Burnham agenda.”
“But there is a bit of concern that ultimately if what’s been proposed so far isn’t enough, that they will go down that higher government spending route, which I think would unnerve the market, and also certainly not be the best thing for the UK economic outlook,” he said.
While Wishart said his team is expecting Burnham to stick to the fiscal rules imposed by outgoing finance minister Reeves, he conceded that many of the new prime minister’s policies remain unknown.
“The bigger uncertainty, I think, is around nationalization, house building … How is that funded?” he said. “I think it’s possible for the government to embark on bigger projects there, but if it requires greater gilt issuance or it’s done by an infrastructure bank, the question for investors funding that is going to be are these projects really going to break even, or is it going to spill over into higher general government borrowing?”
