Burnham’s calm markets mask a coming fiscal assault on wealth
Markets are broadly calm so far this morning ahead of Andy Burnham becoming the UK’s seventh prime minister in 10 years later today, with most of the reaction already having played out over the past week, affirms the CEO of one of the world’s largest independent financial advisory organisations.
Nigel Green of deVere Group’s comments come as sterling holds near a 13-month high against the euro and close to $1.35 against the dollar, gilt yields sit around 4.95% having eased back from a two-month high, and the FTSE 100 trades essentially flat just above 10,500, with investors having already priced in Burnham’s arrival and rallied hard last week on reports that Shabana Mahmood, seen as the fiscally cautious choice, will take the Treasury over Ed Miliband.
He says: “Calm markets this morning tell you nothing about what comes next.
“What we’re looking at is relief that the worst-case chancellor did not get appointed, not confidence in the platform Burnham is bringing into Downing Street.
“Investors and wealthy families need to understand this distinction before they read this stability as a green light.”
Nigel Green warns the current pause reflects a market betting on personnel, not policy.
He says: “Sterling didn’t rally because investors trust Burnham’s fiscal instincts. It rallied because Mahmood was seen as the least damaging option on the table.
“Strip that relief away and you are left with a prime minister who has refused to rule out a wealth tax, who floated an exit charge on departing wealth just months ago through his own Treasury, and who has spoken for years about taxing capital harder than his predecessors dared.”
The deVere CEO points to the scale of wealth already leaving Britain as the real signal beneath the market noise. The UK lost an estimated 16,500 millionaires in 2025, one of the largest outflows recorded anywhere in the world, and industry forecasts suggest that number could climb further in 2026 as tax uncertainty compounds. The UAE, Switzerland and Italy, among other nations, continue to actively court the capital Britain is shedding.
He continues: “A calm currency and a flat index are not evidence that the pressure on wealth has eased.
“They’re evidence that markets are waiting for detail. Burnham inherits a fiscal position where income tax, VAT and National Insurance are protected by manifesto pledges, which leaves wealth, capital gains and departing assets as the only meaningful levers left to pull.
“Anyone assuming today’s quiet trading means the danger has passed is reading the situation badly.”
Nigel Green argues the appointment of a market-friendly chancellor buys time rather than certainty.
He says: “Mahmood’s reputation has bought Burnham a honeymoon with investors, but honeymoons end the moment a Budget lands.
“Every signal from his time as mayor and every hint from his own allies points toward a government that will ask wealthy individuals and business owners to pay considerably more, whether through a wealth tax, an exit charge, or a further increase in capital gains tax.”
He adds: “This is precisely the moment for internationally mobile individuals and business owners to act, not wait.
“Diversifying where assets and structures sit, and building genuine optionality across jurisdictions should already be underway. Waiting for a Budget announcement to confirm the direction of travel means acting after the exits are already crowded and the terms are worse.”
Nigel Green concludes: “Britain briefly looks stable this morning because the market got the chancellor it wanted rather than the one it feared.
“This is a low bar, and it should not be mistaken for reassurance. Wealthy families and entrepreneurs are likely to be treating this calm as a window to prepare, not a signal to relax.
“The pressure on capital in Britain has not eased. It’s simply paused while investors wait to see how hard Burnham is prepared to push once the votes and cabinet appointments are behind him.”