Mr Burnham will be sworn in as the Prime Minister on Monday following the resignation of Sir Keir Starmer

Andy Burnham could turn to Yvette Cooper as a surprise pick for the Chancellor position as the incoming Prime Minister looks to build his cabinet.

The unexpected move means Rachel Reeves would be replaced by the Foreign Secretary in a bid to steady the economy.

Home Secretary Shabana Mahmood is also among the front-runners for the role, alongside Ed Miliband.

The Energy Secretary is said to be willing to turn his back on Net Zero and back North Sea drilling if he is named to the role under the incoming Prime Minister.

The Energy Secretary's apparent policy shift on North Sea extraction represents an attempt to strengthen his Treasury credentials following sustained criticism from trade unions and business leaders over Labour's energy approach.

If granted approval, the Jackdaw site would become the first new North Sea gas field to receive consent in nearly a decade, with supporters claiming it could supply enough gas to heat over one million homes.

The move has reportedly frustrated Keir Starmer's allies, who say they had been urging Ed Miliband to back the project for months.

Despite his lobbying efforts, sources close to Mr Burnham maintain the Energy Secretary remains far from certain to secure the Treasury role.

Concerns have emerged that he would become a lightning rod for criticism of the government, with senior allies of Mr Burnham believing they have succeeded in preventing Ed Miliband from becoming chancellor.

If not appointed to No11, Shabana Mahmood is widely expected to remain Home Secretary.

Lucy Powell looks set for the Deputy Prime Minister role alongside either the Education portfolio or the Labour Party Chair position.

Ms Reeves is understood to be in line for a Cabinet post, with Culture Secretary and Health Secretary both under consideration as potential destinations.

Former transport secretary Louise Haigh is expected to take on the Chancellor of the Duchy of Lancaster brief, with Angela Rayner returning to Housing.

Wes Streeting and David Miliband are among those being considered for the Foreign Secretary role, though the latter would require a peerage, as he currently sits outside Parliament.

Despite his plans, Mr Burnham will receive updated economic forecasts from the Treasury on his first day in office that will paint a challenging picture.

The former Mayor of Manchester will be told by senior civil servants on Monday that he faces a worsening economy, rising borrowing costs and interest rate hikes in his first six months of his premiership.

Internal projections prepared in recent days show inflation climbing to 3.2 per cent by the final quarter of 2026, according to those familiar with transition preparations.

Civil servants will warn Burnham to expect rising gilt yields and at least one Bank of England rate increase before year's end, squeezing his ability to fund ambitious policy commitments.

Should the US-Iran ceasefire collapse, oil prices could surge to $150 per barrel, officials will caution, with energy and food costs bearing the brunt of any price rises.

Air fares are also expected to climb due to disruptions in the jet fuel supply chain.

Mr Burnham will be sworn in as the Prime Minister on Monday following the resignation of Sir Keir Starmer.