Sir Keir Starmer's resignation has fired the starting gun on the race to be the next chancellor, and with Andy Burnham almost certain to become prime minister, all eyes are on who will take charge of the UK's finances. The newly elected Makerfield MP is expected to want a new occupant for Number 11 Downing Street to replace Rachel Reeves, and that person will inherit a daunting in-tray: high debt, low growth, welfare reform, defence spending, and the economic fallout from the US-Israel war with Iran.
Ed Miliband, the former Labour leader and current energy secretary, is now the bookmakers' strong favourite for the number two job in British politics. Paul Johnson, former director of the Institute for Fiscal Studies, sees Miliband's political closeness to Burnham as a positive. "You really don't want people in Number 10 and Number 11 having very different views," he says.
“Ed Miliband is bookies' favourite to become UK chancellor after Starmer's resignation, but faces fierce opposition over net zero policies.”
But opinions are sharply divided on whether Miliband would win the backing of financial markets. Nick Macpherson, the former permanent secretary at the Treasury, told the Financial Times: "The key to gaining the confidence of the markets is to articulate, implement and deliver a coherent strategy. Miliband is one of the few cabinet members with the intellect, experience, and authority to do that."
Others see him as an inflation risk, blaming his drive for net zero for high energy prices. Analysts say that reputation, accurate or not, could affect how bond markets react. Lord Richard Walker, the boss of Iceland and the government's cost-of-living tsar, warned Miliband would be "a disaster", accusing him of being "far too ideological" on climate change and putting "unfair pressure on households... in a very regressive way". Sharon Graham, head of the Unite union, called a Miliband chancellorship a "noose around the neck" of job creation due to his opposition to new North Sea oil and gas drilling. Yet the TSSA union backs him, saying he would take a "different approach" to "delivering an economy that works for everyone".
Wes Streeting, a former contender for the Labour leadership, was the early favourite after backing Burnham and withdrawing his own ambitions, but has since slipped behind Miliband in the betting.
The question now is whether Miliband's record on energy and his perceived ideology will spook the markets the new government depends on to borrow money.