Reeves makes case to remain as chancellor with reports Burnham may favour Miliband

Reeves is facing internal Labour pressure tied to potential changes in prime ministership later this year. Supporters are lobbying MPs to back her if Keir Starmer is replaced, presenting her as the only candidate able to safeguard the country’s finances. The lobbying occurs amid competition among Labour MPs, including uncertainty about whether Andy Burnham could win the Makerfield byelection and replace Starmer. Reports have suggested Burnham might appoint Ed Miliband as chancellor, but Reeves’ allies warn bond markets would not trust him. Reeves’ allies cite her credibility with markets and argue that a double change would undermine assuredness. Recent economic indicators have improved, including higher IMF growth forecasts and faster-than-expected inflation falls.

"Rachel Reeves has launched a rearguard action to save her job as chancellor, telling friends she would like to stay in the post even under a new prime minister. The chancellor's supporters have been urging MPs to back her if Keir Starmer is replaced later this year, saying she is the only candidate who can safeguard the country's finances. The backbench lobbying push comes amid a broader tussle among Labour MPs for position as they prepare for what happens if Andy Burnham wins the Makerfield byelection and replaces Starmer as prime minister."

"Reports have suggested Burnham is considering appointing Ed Miliband as chancellor if he makes it to No 10. But Reeves' allies are warning that the energy secretary would not be trusted by the bond markets, which set the government's borrowing costs. One Labour MP who is close to the chancellor said: I am concerned that we may lose everything if a new leader sacrifices the chancellor for promises and new alliances they are currently forging with MPs who fancy the job for themselves. The biggest fear for the bond markets and the unions is Ed Miliband."

"Another said: Rachel has been very candid with us about the need to carry on. A double change is not the right thing to do. With her credibility in the markets, if Rachel is given a clearer and slightly different direction she could provide the necessary assuredness to the markets. Ed Miliband wouldn't be able to do that. Spokespeople for Reeves and Miliband declined to comment."

"Against the backdrop of tumult in the Labour party, with Burnham having launched his campaign for Makerfield on a pledge to challenge Starmer's leadership, Reeves has had one of her better weeks in office. On Monday the International Monetary Fund increased its forecast for UK growth, predicting the economy would grow 1% this year rather than 0.8%. Then on Wednesday, figures showed inflation falling to 2.8%, faster than economists had expected."

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