FTSE 100 seen flat as Burnham becomes UK PM; City awaits Chancellor

Briefings suggest that current Home Secretary Shabana Mahmood is a strong contender for the Chancellor position, a pick seen as respectable by business, contrasting with earlier market concerns about a potential Ed Miliband chancellorship. Jonathan Reynolds is also expected to be appointed Business Secretary, with his department potentially encompassing technology and science briefs.

Adding to market uncertainty, geopolitical tensions between the United States and Iran have intensified following the recent death of an American service member. Washington's threats of retaliation against Iran for military casualties raise fears of further escalation in the Middle East, potentially disrupting traffic through the Strait of Hormuz. This development could benefit the FTSE 100's oil sector but may weigh on the broader market.

Weekend news also highlighted that creditors of Thames Water are open to public control under Burnham's government, and Burnham has reportedly scrapped a digital ID scheme. Big Tech companies are facing an earnings test after a significant AI spending spree.