UK: Choice of Chancellor will offer clues on fiscal strategy

Research evidence excerpt

UK: Choice of Chancellor will offer clues on fiscal strategy

J P M O R G A N Europe Economic Research

25 June 2026

UK: Choice of Chancellor will offer

clues on fiscal strategy

• Burnham has sent mixed messages on fiscal strategy to date, but his choice Economic and Policy Research

of Chancellor is likely to be revealing Allan Monks

• Continuity appears unlikely. Instead we anticipate a managed rise in (44-20)allan.j.monks@jpmorgan.com7134-8309

borrowing, taxes and spending J.P. Morgan Securities plc

• A more radical third option would be significant reforms to taxation and

spending

• This comes with risk. But if Streeting were chosen as Chancellor, he might

be more open to such a strategy given his approach as health secretary

Andy Burnham has indicated several ambitious changes if he were to become

Prime Minister, including plans for the devolution of power, reforms to the voting

system and nationalizations in some key industries. On fiscal policy the messages

have been more mixed, with preferences for increased spending but without

breaking fiscal rules and manifesto pledges on tax. His upcoming choice of

Chancellor will be insightful in indicating Labour’s fiscal strategy later this year.

One popular view is that little will change substantively, as Burnham seeks to build

credibility with markets at his first Budget later this year. Keeping Rachel Reeves

on as Chancellor would suggest a preference for continuity and the current fiscal

rules. But reporting this week has suggested she is likely to be offered a different

cabinet position. There are some more fiscally conservative options. But Burnham

has limited time to turn around Labour’s poll ratings, with the party already close

to half way through the current five-year parliament.