Burnham Ditches Optimism for Tough Budget Warning
UK Prime Minister Andy Burnham has changed his tone on the upcoming budget, warning that it will be 'challenging' due to deteriorating market conditions. The government's plans for a low-key budget focused on easing cost of living and cutting business costs have been put aside as energy prices rise and inflation grows.
The conflict in the Middle East has pushed up energy prices, causing UK inflation to reach a five-month high ahead of the Bank of England's interest rate decision. Burnham said that 'the picture around the world is challenging' and that difficult decisions will be made to keep the economy on track.
Earlier this month, Bloomberg Economics estimated that the surge in gilt yields would knock about £12 billion off the government's £23.6 billion buffer against its fiscal rules. Burnham rejected criticism from former Bank of England chief economist Andy Haldane, who described the government as 'a traditional tax-and-spend socialist government with better TikTok videos.'