Highlights
- Mahmood is expected to move from the Home Office to the Treasury.
- Senior Labour figures say Ed Miliband is now unlikely to become chancellor.
- Markets responded positively to reports of Mahmood's possible appointment.
- Burnham says cabinet decisions will be announced after he enters Downing Street.
HOME SECRETARY Shabana Mahmood has emerged as the leading candidate to become Andy Burnham's chancellor when he forms his government next week, according to senior Labour figures.
According to various media reports, Mahmood is now the favourite to replace Rachel Reeves at the Treasury, although Burnham's team insists no final decisions have been made.
Sources familiar with Burnham's thinking told The Guardian they expect Mahmood to move to the Treasury, while energy secretary Ed Miliband, who had also been considered for the role, is now more likely to become foreign secretary.
The contest over the chancellor's job has divided Burnham's supporters in recent weeks. Miliband's backers argued he shared Burnham's economic vision and could challenge Treasury thinking.
However, critics within the party warned that appointing him could unsettle financial markets and become a political risk because he led Labour to defeat in the 2015 general election.
One Labour source told The Independent: "Shabana is in the driving seat for the job. It won't be Ed now. But Andy is going to do things differently from before."
Another source said: "Ed Miliband's previous as leader is problematic. The net zero stuff isn't ideal either."
According to The Guardian, some of Burnham's allies also became concerned after talks with business leaders and investors ahead of the change in government. One source said: "The access talks have certainly focused minds on the economy and the challenges of the autumn."
Reports that Mahmood had become the frontrunner were welcomed by financial markets. Sterling strengthened against the US dollar, while UK government borrowing costs edged lower. Investors are said to see Mahmood as a steadier choice because she has not taken strong public positions on economic policy.
Energy Security and Net Zero secretary Ed Miliband arrives at Downing Street for Keir Starmer's final cabinet meeting on July 15, 2026 in London, England. (Photo by Carl Court/Getty Images)
Mahmood, however, is understood to have discussed wider political strategy and the economy with Burnham in recent days. Her allies insist she has not been told she will become chancellor.
Burnham's team has dismissed claims about cabinet appointments as speculation, saying decisions will only be confirmed after he enters Downing Street on Monday (20).
If appointed, Mahmood's first major task would be preparing an emergency package to help with the cost of living before beginning work on an autumn Budget, according to reports.
Speaking on Gary Lineker's podcast, Burnham also refused to rule out future tax rises. He said, "I do believe we need a greater sense of fairness," but added he did not want to "demonise one group" or create further division. He said decisions on tax "are not for now. They're for another day."
Mahmood's spokesperson said any appointments were a matter for Burnham's office, while Burnham's team declined to comment.
