Andy Burnham rhetoric coincides with 18-year gilt yield high
The Daily Mail's editorial criticises new Prime Minister Andy Burnham for Left-wing rhetoric that it says has spooked financial markets, arguing his stance echoes 1970s-style economics and undermines confidence ahead of next month's Budget. It contrasts his approach unfavourably with Conservative leader Kemi Badenoch's welfare-cuts plan, and separately criticises Labour figures over remarks on defence spending and comments made about a pregnant Tory frontbencher.
The piece notes that ten-year gilt yields hit an 18-year high following Burnham's first Commons speech as PM, with economist Lord O'Neill, described as a Burnham ally, saying the speech's tone was "the last thing investors wanted to hear." Burnham declined to rule out tax rises or higher borrowing, instead repeating phrases such as "growth in every postcode." The article also highlights Badenoch's roadmap for further welfare cuts atop £23 billion in identified savings, Vladimir Putin's veiled remarks about targeting UK factories, and Harriet Harman's criticism of Claire Coutinho's promotion, which the Mail calls hypocritical given Coutinho's pregnancy and maternity leave.
- Daily Mail attacks PM Burnham's Left-wing rhetoric after bond market slide
- Gilt yields hit 18-year high; economist calls tone unnerving to investors
- Editorial also hits Labour on defence spending and Harman's Coutinho remarks
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UK government borrowing is funded partly by selling gilts, which are bonds that pay investors interest. The yield is the return investors demand: it can rise when gilt prices fall or when lenders see more risk in lending to the government.
The Prime Minister sets the government’s economic direction, while the Chancellor presents tax and spending plans in the Budget. Investors watch ministers’ comments for clues about future borrowing, taxes and spending, because these choices can affect the government’s finances and the cost of borrowing.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Burnham’s language on growth and public investment may signal an effort to tackle regional inequality and weak public services, while leaving tax and borrowing choices open until the Budget clarifies the plan. Investors’ concern after his speech could reasonably be seen as a warning that the Government needs to explain how it will fund its priorities and support confidence, rather than proof that its economic approach is unsound.
The case against
With gilt yields already a concern, investors may reasonably view the absence of clear limits on tax rises or borrowing as added uncertainty, particularly if the Government’s rhetoric suggests a departure from fiscal restraint. Burnham’s allies can make the case for regional investment, but markets and the public may want credible detail on costs, growth assumptions and debt before accepting that the approach is sustainable.
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Originally published by Daily Mail as “DAILY MAIL COMMENT: The PM’s Left-wing rhetoric, the bond markets and a VERY harsh lesson in economics”.