London's top hedge fund managers on Andy Burnham: "It's all a mess"

Keir Starmer is going. Andy Burnham is coming and the UK is in for another sweaty summer of uncertainty. For many of London's financial services professionals, the Burnham coup is another notch down in Britain's stability. Burnham will be Britain's sixth prime minister in seven years. Since 2022, the country has been ruled by Liz Truss (49 days); Rishi Sunak (one year nine months) and Starmer (23 months).

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"It's all a mess," says one London hedge fund founder. "It was a mess before and it's a mess now." A senior trader says Burnham's credibility will be seriously tested: "He's a guy who built his popularity in the North, fighting Westminster. He has no credible economic political programme, except, 'I'm not Starmer and I'm from the North.'"

Another senior trader tells us that he came to the UK from a politically unstable country and that it now feels like he never left. "The prime minister changes every year, some lasting only a few weeks and political propaganda seems to have taken over the agenda. We have a mix of high inflation, high debt and sluggish growth that could prove irreversible." 

One banker who describes herself as a "closet leftie," said Burnham, who graduated in English literature from Cambridge University, has been over-estimated: "I'd have preferred Yvette Cooper." Another trader blamed "capitalism" for the situation the country finds itself in: "People just want to maximise their own income and vote for that. Increasing taxes isn't the solution when GDP is shrinking. We need a non-Conservative version of Thatcherism but is that even possible?" 

The head of one British macro hedge fund said Burnham will be cut some slack if he appoints the right person to 11 Downing Street. "Burnham needs a name that's credible in terms of fiscal discipline," he says. "If he appoints Wes Streeting or someone of similar standing, then markets will give him the benefit of the doubt." Burnham is a better communicator than Starmer, the hedge fund manager observed. That counts for something.

Starmer's tearful departure reflects the unforgiving nature of the job. Writing in the Times at the weekend, former UK PM (and ex-Goldman Sachs analyst) Rishi Sunak, said "any embattled prime minister has dark nights of the soul."  

"Starmer tried his best with very limited options," says the top macro PM. "It's probably the right time for Starmer to go but he deserves a lot more credit than he gets," says one junior banker at a US bank. 

One senior macro trader in a bank observed that the UK is on its own economic path, caught between US tariffs and Eurozone constraints. Solving this requires a new, more entrepreneurial approach from government. "No one in politics today has a credible plan for the UK economy," said another senior credit trader. "All that I know is that our cost of funding will not go down. Nor will our net debt to GDP."    

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