Faisal Islam: The new PM has big ideas - but what will they cost?
New UK Prime Minister Andy Burnham faces immediate economic challenges as he balances campaign promises with fiscal constraints. Markets are closely watching his approach to borrowing rules and potential tax threshold adjustments.
Why it matters
The economic policy decisions of a new administration have immediate implications for national debt, market stability, and the cost of living.
Image source, Bloomberg via Getty Images By Faisal Islam Economics editor Published 9 minutes ago Up until this point, the new Prime Minister Andy Burnham has described his policy changes with a broad brush. From today, he faces the constraints, trade offs, and realities of high national office.
For example, Burnham has said Tuesday's announcements on cost of living support would be paid for. In other words, it would mean a tax rise or spending cut, so we will see rather quickly what the new PM prioritises when push comes to shove.
Meanwhile, the markets seem to have already reacted to the suggestion he would be using some "flexibility" in his borrowing rules to help with new announcements.
The UK government's 10-year borrowing rose above 5% on Monday after falling in recent days. It has not gone up in this way in other European economies.
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