Andy Burnham Becomes UK Prime Minister, Names John Healey Chancellor as Debt Hits 94.9% of GDP
Updated
Updated · CNBC · Aug 19
Andy Burnham Becomes UK Prime Minister, Names John Healey Chancellor as Debt Hits 94.9% of GDP
3 articles · Updated · CNBC · Aug 19
Summary
Andy Burnham replaced Keir Starmer as U.K. prime minister and installed former defense secretary John Healey as chancellor after Healey's resignation over defense spending helped trigger Starmer's exit.
0.4% second-quarter growth gives Burnham a weak starting point: the economy shrank 0.1% in April after the Iran shock, then only modestly recovered, with surveys pointing to continued but subdued expansion in July.
94.9% debt-to-GDP and rising welfare costs now sit alongside a softer labor market, after Rachel Reeves's 2024 payroll-tax increase was blamed for higher unemployment, fewer vacancies and a damaged relationship with business.
Burnham's early cabinet choices have drawn a warmer reception from markets and business — including Healey, deputy Lucy Rigby and AI minister Kanishka Narayan — though folding the science department into the business ministry has alarmed some.
£14 billion takeover activity around Segro and a FTSE 100 up nearly one-third since July 2024 underline a broader disconnect: U.K. equities have rallied largely on overseas earnings and cheap valuations, not domestic economic strength.