Uk Prime Minister Keir Starmer has appointed Baroness Minouche Shafik, former deputy governor of the Bank of England, as his chief economic adviser in a bid to strengthen his government’s economic team ahead of a critical autumn Budget.
Government officials confirmed that Shafik will take up the role in Number 10, where she will act as a bridge between the prime minister and the Treasury. Her responsibilities will include bolstering the government’s economic standing with businesses and international investors, as well as shaping growth and productivity strategies.
Shafik’s appointment comes as part of a broader reshuffle of Starmer’s inner circle at the start of the new parliamentary term. Labour insiders say the move is designed to “sharpen things up” and accelerate policymaking. Allies of Chancellor Rachel Reeves have also welcomed the decision, rejecting suggestions it might undermine her influence. Instead, they argue a heavyweight adviser in Downing Street will improve coordination and add “grit” to the policymaking process.
The chancellor has recently faced criticism from Labour MPs over controversial welfare savings plans and a now-abandoned proposal to cut winter fuel payments for 10mn pensioners. She is expected to face pressure to raise taxes in order to meet fiscal rules and close a public finance gap estimated at more than £20bn. Treasury officials are currently weighing options, including higher property taxes.
About Minouche Shafik
Shafik, who entered the House of Lords in 2020, resigned last year as president of Columbia University in New York following criticism of her handling of student protests over the Israel-Hamas conflict. A former deputy managing director of the IMF and vice-president of the World Bank, she also previously served as the UK’s top civil servant at the Department for International Development and could be a contender to succeed Andrew Bailey as Bank of England governor when his term ends in 2028.
Her appointment follows Starmer’s removal of Nin Pandit as his principal private secretary, replacing her with Treasury official Dan York-Smith, further underlining the prime minister’s intent to tighten his grip on economic policymaking.