Burnham Faces PMQs as Borrowing Costs Hit 18-Year High

UK Prime Minister Andy Burnham faces his first Prime Minister's Questions (PMQs) since taking office, amidst a backdrop of soaring borrowing costs. The yield on benchmark 10-year government bonds has reached its highest level in 18 years, at approximately 5.25 per cent, while longer-term costs have risen to levels not seen since 1998.

The market turmoil poses an immediate challenge for Burnham and Chancellor John Healey as they prepare a Budget intended to advance regional investment, cost-of-living relief, and greater public control of essential services.

Burnham will face Conservative leader Kemi Badenoch at his first PMQs, with the opposition leader expected to challenge him over how he plans to fund his ambitions. The government's borrowing costs are a concern, as they increase the cost of new borrowing and refinancing, which could force Healey to limit spending or raise revenue.

The Bank Rate stands at 3.75 per cent, while inflation remains above the Bank of England's 2 per cent target. Economists estimate that the government's financial buffer could roughly halve if current conditions persist, although the Office for Budget Responsibility has not published its official forecast.