The Week Ahead (22nd -26th June): Labour leadership challenge

With the US and Iran expected to begin negotiating a permanent peace deal shortly (as soon as fighting stops in Lebanon), let’s focus this week’s edition of The Week Ahead on something else.

Labour leadership challenge: Keir Starmer remains PM but Andy Burnham’s victory in the Makerfield by-election has set up the imminent threat of a leadership challenge with potentially far-reaching financial and economic consequences.

Burnham confidently addressed his supporters in a speech on Friday morning, but did not go so far as to directly challenge Keir Starmer.

He may not have to, as the majority of the cabinet are thought to already believe that his rise to power is inevitable - but are not yet willing to force the matter.

In a call on Friday, Keir Starmer is quoted as saying “I’m not going to walk away”. Bloomberg reports that Burnham plans to speak to Starmer in the next few days.

The financial implications of a Burnham premiership will be analysed in great detail in the weeks and months ahead. JP Morgan and Goldman Sachs have separately argued to their clients that Burnham would break existing fiscal rules. Higher spending would in turn delay interest rate cuts, as the Bank of England would not want to provoke excessive demand.

Upward pressure on the UK 10-year gilt yield continues. It reached a high of 5.2% when Josh Simons vacated his Makerfield seat to allow Burnham to run for parliament, and currently sits at 4.8%.

According to the betting markets, it's almost a done deal at this point, and is only a question of timing. Paddy Power says that Andy Burnham is 40/1 on to be the next PM. And at the prediction site Polymarket, there is a 91% chance that Andy Burnham will be the next PM - and that he will achieve this at some time in the current calendar year.

In company news, we will have many AGM statements to look at in the week ahead. And on Thursday we'll have full-year results due from Volex, Wise and Moonpig.

With Wise now being dual-listed on both the Nasdaq and the LSE, they plan to release their results after the US market closes on Thursday evening. So we will cover that one in Friday's report.

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Economic Calendar

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Companies Reporting