Andy Burnham Appoints John Healey as Chancellor of the Exchequer

Prime Minister Andy Burnham appointed John Healey as the United Kingdom's Chancellor of the Exchequer on July 21, 2026. The appointment triggered a sharp rally in UK and European defence shares, with Babcock International rising 6%, QinetiQ gaining 4%, and BAE Systems climbing 3.3%. Investors anticipate that Healey, the former defence secretary, will drive funding increases to meet the Nato target of 3.5% of GDP by 2035.

Healey previously resigned from the government of former Prime Minister Keir Starmer after criticizing the previous administration's defence investment plan. He argued that the government was failing to commit the resources necessary to protect the country against rising threats. While a spokesperson for the Prime Minister called the appointment a "signal of intent," the government has so far declined to commit to a 3% GDP spending target by 2030 and is not considering the use of "defence bonds" to raise capital.

In additional cabinet changes, Burnham appointed Jonathan Reynolds as Business Secretary and merged the Department for Science, Innovation and Technology into the business department. Other market reactions were mixed; water firm shares drifted lower following Burnham's calls for more industries to be under "public control." Analysts suggest the government may need to find flexibility in fiscal rules or reduce welfare spending to fund Burnham's broader agenda, which includes cutting VAT on domestic energy.