Reeves backs Burnham to be UK prime minister and sidesteps questions on her own future

UK Chancellor Rachel Reeves threw her weight behind Andy Burnham to become Britain's next prime minister on Thursday, casting his expected ascent as a guarantee of economic continuity even as she declined to say whether she would keep her own job at the Treasury.

Speaking at a British Chambers of Commerce conference, and in a BBC interview the same day, Reeves said Burnham, the Mayor of Greater Manchester, "will be the next prime minister" and had made clear he was committed to her fiscal rules. The remarks, reported by Reuters, came three days after Prime Minister Keir Starmer announced his resignation, and they all but closed the question of who will lead the governing Labour Party next.

Reeves used the endorsement to reassure business and financial markets that the change at the top would not mean a change of economic course. According to Reuters, she argued that Burnham's commitment to her fiscal framework — balancing day-to-day spending with tax revenue and getting debt falling as a share of national output — meant policy would not be torn up.

That is a good thing because it means that businesses here can be confident that that stability, that rigour to policymaking, that tight grip on the public finances… will be continued.

An endorsement, and a careful deferral

Pressed on her own position, Reeves was conspicuously non-committal. Media reports have suggested she could be moved to a more junior role if Burnham forms a government, with figures including Wes Streeting, Ed Miliband, Pat McFadden and Yvette Cooper floated as possible successors at the Treasury. She declined to engage with the speculation.

"I'm backing Andy. I think he'd be a great prime minister, but those are his decisions, not mine to make," she told the BBC, according to outlets that carried the interview. Asked whether she wanted to stay as chancellor, she said only: "I'm not going to pre-empt the decisions that the new prime minister will make."

Notably, Reeves did not put herself forward for the leadership. A close ally of Starmer for years, she framed her intervention as a matter of stability rather than personal ambition, lining up behind the clear front-runner rather than mounting a rival bid.

A contest that may be a coronation

Burnham is, for now, the only declared candidate to replace Starmer, and is widely expected to be installed without a fight. He secured a route back into Parliament on 18 June by winning the Makerfield by-election with about 25,000 votes and a majority above 9,200, according to accounts of the contest. That gave the long-serving metro mayor the Commons seat he needed to stand for the leadership.

His path cleared further when Streeting, the former health secretary once seen as his main rival, said he would not run and would instead back Burnham. Under Labour's rules, contenders need nominations from at least 81 of the party's MPs to get on the ballot.

• 22 June: Starmer announces he will resign as prime minister and Labour leader.
• 9 July: Nominations open in the leadership contest.
• 16 July: Nominations close; an unopposed Burnham could be confirmed.
• Mid-July: Burnham could enter Downing Street around 17 July if no challenger emerges.

If he takes office, Burnham would become Britain's seventh leader in a decade, Reuters noted — a measure of the political churn that has gripped Westminster since the 2016 European Union referendum.

Why a Westminster reshuffle matters beyond Britain

The turnover at the top of a major European economy carries weight well beyond the United Kingdom. Britain remains one of the European Union's largest trading partners and a significant market for euro-zone investors, and abrupt changes of leadership have repeatedly rippled through currency and bond markets in recent years.

This time, the early market reaction was muted to positive. Sterling firmed after Reeves spoke, with the pound trading around 0.2% higher against the US dollar near 1.3200 during European hours, according to FXStreet — a sign that investors read her message of fiscal continuity as reassuring rather than destabilising.

For Luxembourg, where the financial centre and cross-border investors track UK policy closely, the signal that matters is continuity: a new prime minister who has publicly committed to the existing fiscal rules, endorsed by the chancellor who wrote them. Whether that continuity survives a cabinet reshuffle — and whether Reeves herself remains at the Treasury to enforce it — is the question her careful answers on Thursday left deliberately open.

Starmer's resignation followed a punishing run for Labour, including heavy losses at the 7 May local elections and a cascade of ministerial departures through May and June. Burnham, who built a national profile as mayor by positioning himself to the party's left and pressing for greater devolution to England's regions, now stands on the threshold of the office he has long been tipped to seek.