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UK Home Secretary Shabana Mahmood has emerged as the frontrunner to become chancellor under incoming Prime Minister Andy Burnham, according to media reports. The Financial Times, citing people briefed on Burnham’s plans, reported on Wednesday that Mahmood is set to replace Rachel Reeves at the Treasury when Burnham formally announces his cabinet on Monday after becoming prime minister. The i Paper also reported that Mahmood now leads the race for chancellor and has indicated she would be willing to leave the Home Office to take the Treasury job, citing a senior Labour source. According to the FT, the prospect of Mahmood taking the role was welcomed by financial markets. UK government bonds outperformed European peers and sterling strengthened as investors welcomed the prospect of Mahmood becoming chancellor. The FT said markets viewed Mahmood, who is on the right of the Labour Party, as more fiscally disciplined than Energy Secretary Ed Miliband, who had previously been seen as the frontrunner for the Treasury role. Burnham’s first major fiscal challenge will be the autumn budget. He has indicated he may need to ‘ask for a little bit more’ in tax and has declined to rule out wealth taxes, saying fiscal decisions would be ‘difficult’. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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