Burnham is about to take over Stammer! Investors keep an eye on the Chancellor of the Exchequer, and the pound

The Zhitong Finance App learned that as Andy Burnham is about to succeed Keir Stammer as Prime Minister of the United Kingdom, and the market is closely awaiting confirmation of the candidate for the new Chancellor of the Exchequer, the British pound remained stable overall on Monday. As of press release, GBP/USD was basically flat, at 1.3467 US dollars; GBP/EUR rose slightly by 0.11% to 1.1774 EUR per pound.

On July 17, local time, Britain's ruling Labour Party announced at a special conference that Burnham was elected leader of the Labor Party and will succeed Stammer as prime minister after being appointed by King Charles III. According to the procedure, Stammer will submit his resignation to the king on July 20. Burnham will then be appointed by the king to officially become prime minister.

Burnham did not experience fierce competition in this election; instead, he became the sole candidate with support from within the party. Previously, as mayor of Greater Manchester for a long time, he has accumulated a high reputation within the Labour Party with his experience in local governance and his representative image of the northern regions of England.

In his first speech after taking office as party leader, Burnham said that the new administration will “create a new political pattern” and change the “political direction,” and that the Labor Party should make the public “believe that we can build this country better” and “push Britain forward as a whole.” Burnham also stressed that the Labor Party government under his leadership will promote economic revitalization, strengthen public sector management, and return more power to the local community.

Some analysts pointed out that Burnham's core political capital is the “Manchesterism” he formed during his tenure as mayor of Greater Manchester for more than 9 years. Burnham has held this position since May 2017. During his administration, Greater Manchester, located in the north of England, changed markedly: high-rise buildings in central urban areas rose to prominence; construction of residential areas and commercial complexes accelerated; and public transportation was once again managed uniformly by the local community and supported by the public. The data shows that from 2015 to 2023, the average annual growth rate of the Greater Manchester economy was about twice that of the UK as a whole, making it one of the fastest-growing regions in the UK.

Burnham's governing philosophy is known as the “Manchester Doctrine”. The core content is to decentralize power to the local community while strengthening government regulation of the public service sector. Burnham has previously indicated that he would promote this concept to the national level, and proposed moving some national functions out of the capital London, expanding local autonomy in the fields of housing, transportation, education, etc., and reversing the excessive concentration of resources in London. In addition, Burnham also advocates expanding the construction of affordable housing, advancing social welfare reforms, and at the same time seeking to strengthen ties with Europe and “consolidate” the progress made in current negotiations with the European Union.

However, like his predecessors, Burnham's path to power will not be easy. Social welfare, defense spending, cost of living, geopolitics... Burnham is facing “a mountain of challenges.” Many of these issues may affect financial markets, including weak economic growth and market concerns about fiscal discipline.

So in recent weeks, one of the biggest concerns of investors has been which Chancellor of the Exchequer Burnham will choose. Last week there were reports that Burnham might appoint Shabana Mahmoud, who is seen as centrist, as Chancellor of the Exchequer rather than a more left-wing candidate. The news boosted support for British assets, and the market interpreted it as Burnham not planning to drastically increase government spending as some investors had previously feared.