Prime Minister Andy Burnham faced sharp criticism after his first Commons statement, with Conservative leader Kemi Badenoch calling him a "spendthrift" and a "people pleaser" who cannot say where funding for his promises will come from. Long-standing ally Lord Jim O'Neill also urged Burnham to "get real" on controlling spending, warning that market unease over the UK's fiscal strategy could push up mortgage rates. The row comes as rising government borrowing costs threaten to blow a large hole in the public finances ahead of the Budget.

Gilt interest rates rose during Burnham's Commons statement, having already hit multi-decade highs, driven partly by the Iran conflict, persistent inflation and fears over an AI stock bubble, though the UK is seen as especially exposed. Experts warn Chancellor John Healey may need to find up to £14billion through tax rises, and less likely spending cuts, to stabilise the finances at the Budget on 28 October. Burnham highlighted two early tax cuts, including scrapping VAT on energy bills, but would not rule out tax increases. Sir Howard Davies, former NatWest chairman, said the bond sell-off did not reflect a major crisis of confidence but agreed concerns over Burnham's spending approach were unsettling markets, predicting a "very uncertain" few weeks ahead.