As speculation swirls around Andy Burnham's potential bid to oust Sir Keir Starmer as Labour leader, the Mayor of Greater Manchester has made a bold move to bolster his fiscal credentials – appointing three heavyweight economists to advise him on economic policy. The high-profile recruits, including former Bank of England Chief Economist Andy Haldane and crossbench peer Lord Jim O'Neill, come with a raft of experience in shaping Britain's financial landscape.
The decision to expand his team of economic advisers is widely seen as an attempt to reassure financial markets about Mr Burnham's approach to the economy. With the Makerfield by-election result due out on Friday, the Labour Party veteran is hoping to return to Parliament and potentially launch a leadership challenge within weeks. If successful in securing the seat, Mr Burnham would face intense scrutiny of his economic plans – particularly his commitment to maintaining market confidence.
Mr Haldane's appointment is significant, given his previous advocacy against interest rate rises and exploration of 'war bonds' for defence funding. His views on monetary policy could have a major impact on the Bank of England's decision-making process if Mr Burnham were to become Chancellor. Meanwhile, Lord O'Neill's expertise in economic strategy, honed during his tenure as Treasury minister under George Osborne, will be invaluable to the Labour leader hopeful.
The timing of these appointments suggests a strategic effort by Mr Burnham to reassure financial markets and address concerns about increased borrowing or economic instability that could arise from a change in party leadership. However, allies of Sir Keir Starmer have cautioned that such a leadership battle could destabilise both the country and the wider economy.
While some within Labour believe Mr Burnham still needs to fully articulate how he plans to maintain market confidence, his team remains confident of securing the necessary backing from over 81 Labour MPs. There has also been considerable speculation regarding who Mr Burnham might appoint as Chancellor if he were to become leader – with names including Energy Secretary Ed Miliband and former Defence Secretary John Healey being mentioned in political circles.
The recruitment drive is seen by some as an attempt by Mr Burnham to reassure markets about his economic credentials, amid concerns that a change of leadership could lead to increased borrowing or economic instability. However, the decision also raises questions about how he plans to balance the needs of different interest groups within Labour – particularly those who may be critical of his economic policies.
As Mr Burnham campaigns in Makerfield, it remains unclear whether Sir Keir Starmer will agree to stand down if challenged by the Labour veteran. If not, Mr Burnham is expected to launch or join a leadership contest – one that could have significant implications for both the country and the wider economy.