UK to get new prime minister as Trump slams Britain as ‘Poverty-stricken disaster’

Andy Burnham is expected to become the UK’s seventh prime minister in ten years on Monday, as investors and market watchers are already questioning his policies.

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

After that, he is expected to deliver his first speech as Prime Minister and express his vision for the country.

US President Donald Trump has 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 called North Sea oil “precious,” adding that it would take the UK “from a Poverty-stricken Crisis, to one of the Richest Countries anywhere on Earth!”

Starmer announced last month that he would step down, after a series of policy changes, recruitment scandals and a stunning loss in Britain’s general election sparked calls for him to step down.

Burnham was unopposed in the race to lead the ruling Labor Party.

He returned to parliament a few weeks ago, after winning a by-election in Makerfield, a county in the north of England. Only sitting members of parliament can run for the leadership of the Labor Party.

Before returning to Westminster, Burnham – nicknamed Labour’s “King of the North” – served as Mayor of Greater Manchester, one of the UK’s largest metropolitan areas. Before taking on almost ten years 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 on Friday as he officially became Labor Party leader.

The prospect of Burnham, who is considered more left-wing than Starmer, as acting prime minister sent jitters through bond markets earlier this year. Investors in UK government bonds, known as gilts, have shown strong support for Starmer and his Chancellor of the Exchequer, Rachel Reeves, who remain in their roles, because of their commitment to rein in public borrowing and spending.

In his speech on Friday, Burnham promised to reform “big things” such as social care policy, and criticized the changes that took place in Britain in the last few decades after “political power was centralized and economic power was privatized”.

In a letter last week, Rachel Vahey, head of public policy at AJ Bell, said that while much remains unclear about Burnham’s policy direction, “there have been indications of how Burnham will take us when he takes office.”

“Recent rumors that the Autumn Budget could be extended to include a review of departmental spending suggest that anything from Burnham’s first Budget could be too big,” he said. “It’s possible that this could mean more tax changes and new policies that affect people’s finances.”

Vahey added that although Burnham is committed to honoring the promises of the Labor manifesto, including not increasing the income tax, it does not mean that long-term plans are in line with those promises.

“Meanwhile, there has been speculation that Burnham may consider reforming inheritance tax and council tax, as well as introducing ‘stronger public control’ of essential services such as energy, transport and water,” he noted.

Andrew Wishart, senior UK economist at Berenberg, told CNBC’s “Europe Early Edition” on Friday that the market now seems “relaxed about the Burnham agenda.”

“But there is a concern that in the end if what has been proposed so far is not enough, they will come down to that high level of government spending, which I think will disrupt the market, and certainly will not be the best thing for the UK’s economic outlook,” he said.

While Wishart said his team expected Burnham to stick to the financial rules set by outgoing finance minister Reeves, he admitted many of the new prime minister’s policies are still unknown.

“The biggest uncertainty, I think, is about national housing, housing… How is that financed?” he said. “I think it is possible for the government to start big projects there, but if it requires a large issuance of gilt or is done by an infrastructure bank, the question that will be there in terms of funding for investors is whether the project will really break even, or will it spill over into higher government borrowing?”