UK to get new prime minister as Trump slams Britain as ‘Poverty Stricken Disaster’

Andy Burnham is set to become Britain’s seventh prime minister in a decade on Monday; investors and market watchers are already questioning his policy agenda.

King Charles will ask Burnham to formally form a government at Buckingham Palace this morning, ahead of her official appointment as prime minister.

After this, he is expected to make his first speech as prime minister and reveal his vision for the country.

US President Donald Trump welcomed Burnham’s plan to accelerate oil and gas exploration in already licensed fields in the North Sea.

Writing on Truth Social over the weekend, Trump described North Sea oil as “priceless” and added that it would take Britain “from a Poverty-War 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 political U-turns, scandals over staff appointments and a dramatic loss in local elections in Britain led to calls from his own ranks for his resignation.

Burnham had no rivals in the race to lead the ruling Labor Party.

He returned to parliament a few weeks ago after winning a by-election in the Makerfield constituency in the north of England. Only incumbent MPs can run for the Labor Party.

Nicknamed Labour’s “King in the North”, Burnham was Mayor of Greater Manchester, one of the UK’s largest metropolitan areas, before returning to Westminster. Prior to his nearly decade-long tenure as mayor, he was a Labor MP and held cabinet posts under prime ministers Tony Blair and Gordon Brown.

“I’m ready,” Burnham told supporters as she officially became leader of the Labor Party on Friday.

The prospect of Burnham, who is considered more left-wing than Starmer, to replace the incumbent prime minister caused tension in bond markets earlier this year. UK government bond investors, known as gilts, appear to be largely supportive of Starmer and his finance minister Rachel Reeves remaining in their posts due to their commitments to rein in public borrowing and spending.

In her speech on Friday, Burnham vowed to fix “big problems” such as social care policy and criticized changes that have occurred in Britain over the last few decades following the “centralization of political power and the privatization of economic power”.

Rachel Vahey, AJ Bell’s head of public policy, said in a memo last week that much about Burnham’s policy path remains unclear, but “there are hints of the direction Burnham will take once in office.”

“Recent rumors that the Autumn Budget could be expanded to include a ministerial spending review suggest that whatever emerges from Burnham’s inaugural Budget could be hugely significant,” he said. “It’s entirely possible that this could mean a raft of tax reforms and new policies affecting people’s finances.”

Vahey added that Burnham Waiting was committed to delivering on Labor’s manifesto commitments, including not raising income tax, but did not rule out long-term plans that conflict with those promises.

“There is speculation that in the near term Burnham may consider reforming inheritance tax and council tax, as well as introducing ‘stronger public control’ over essential services such as energy, transport and water,” he said.

Berenberg’s senior British economist Andrew Wishart told CNBC’s “Europe Early Edition” on Friday that the market now looks “quite comfortable with the Burnham agenda.”

“But there is some concern that if what has been proposed so far is not enough, they will end up going down the path of higher government spending, which I think will unnerve the market and also certainly not be the best thing for the UK economic outlook,” he said.

While Wishart said his team expected Burnham to stick to the fiscal rules imposed by outgoing finance minister Reeves, he acknowledged many of the new prime minister’s policies were unknown.

“I think the biggest uncertainty is around expropriation and house building… How is this financed?” he said. “I think it is possible for the government to embark on larger projects there, but if it requires a larger gilt issuance or is done by an infrastructure bank, the question for investor financing will be will these projects actually break even, or will they be reflected in higher general government borrowing?”