Burnham brings in top economists before possible leadership run | Andy Burnham
Three economic figures have been brought in to advise Andy Burnham as he tries to reassure markets ahead of his return to parliament and potential challenge to Keir Starmer.
Burnham is understood to have taken advice from Andy Haldane, the former chief economist at the Bank of England, Richard Hughes, the former head of the Office for Budget Responsibility, and former Treasury secretary Jim O’Neill, who worked on George Osborne’s “Northern Powerhouse”.
Burnham’s decision to back her team of economic advisers, first reported by Bloomberg and the Financial Times, shows she is willing to signal her financial credibility. It is not yet clear to what extent they were involved in preparing economic plans.
The mayor of Greater Manchester won the crucial Makerfield by-election with a huge majority on Friday, paving the way to challenge Starmer’s leadership.
No 10 and the Treasury will closely monitor bond markets on Friday morning for any signs that investors are worried about economic instability caused by higher borrowing or a possible change of leader and chancellor.
Burnham is expected to try to oust the prime minister within weeks, first by trying to persuade him to resign. If Starmer refuses to set a date for his departure, Burnham is likely to launch or enter a contest, his team confident that more than the required 81 MPs will back him.
But Starmer’s allies have warned that the country and economy could become unstable due to the leadership race.
Aside from the impact of the leadership battle, some within the Labor Party believe Burnham still needs to make a statement to persuade markets to remain calm after previously saying the country should be less exposed to a backlash from bond traders.
He has since softened his words, saying they were misinterpreted. “I’ve said for a long time that it’s a way of running the economy that we’re giving up control of the fundamental drivers of the economy,” he told the FT.
He also said he had no plans to change the fiscal rules that Chancellor Rachel Reeves had committed to before the last election.
There is also huge speculation about who he might appoint as chancellor, ahead of his possible challenge to Starmer. Names mentioned include energy secretary Ed Miliband, John Healey, who resigned as defense secretary last week, and even leadership rival Wes Streeting.
Haldane, chief executive of the Royal Society of Arts, earlier this year urged the Bank of England against raising interest rates and laid out how war bonds could be used to raise money for defence.
Hughes, who resigned last year after the OBR mistakenly published Reeves’ budget too early, is now a senior economic adviser at London-based fund manager Taula Capital.
O’Neill recently wrote a plan to stimulate the economy; It has validated the bond and stock market rally, a construction boom, rising business and consumer confidence, and political returns that come with broad-based gains in voters’ living standards.
Haldane, O’Neill and Hughes did not immediately respond to requests for comment.
