Andy Burnham has spoken of radical, transformative change to overturn decades of neoliberal economic policy, but signals from the Treasury ahead of Chancellor John Healey's 28 October budget suggest continuity rather than a sharp break. Healey is expected to echo predecessor Rachel Reeves's emphasis on investment and devolution in a growth speech, while deferring difficult decisions such as when the UK will reach 3% of GDP on defence spending, pushing that call to next year's spending review instead of settling it now.

The budget is likely to focus on filling gaps in the defence investment plan and possibly offering modest relief on energy bills from January, though not via a windfall tax on banks, which Healey has resisted despite pressure from the TUC. Volatility in bond markets, highlighted at the recent G20 finance ministers' meeting, has already eroded much of the £24bn fiscal headroom Reeves had built up, with further pressure from lower migration forecasts and the cost of Burnham's VAT cut on electricity bills. The Institute for Fiscal Studies warns that meeting existing spending commitments, including the 3% defence target, will be extremely difficult without tax rises, given tight departmental budgets planned for the latter half of the parliament.