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Burnham faces high debt and weak growth as borrowing stays elevated

A pullback in energy prices and gilt yields has eased some of the public finance pressure linked to the US-Israeli war on Iran, analysts say.

Reported · Written up by our desk · Europe

Andy Burnham, set to replace Keir Starmer, is entering office with borrowing elevated, national debt at its highest level since the 1960s, and weak growth, while spending demands are rising for defence, net zero and an ageing population, according to Guardian Economics.

The article notes that under pressure from bond markets Burnham has pledged to stick to Labour’s current fiscal rules.

It also points to a potential easing in the backdrop as global oil prices have fallen back to around $72 a barrel, after fears during the US-Israeli war on Iran that UK inflation could reach 4.5% and GDP growth could fall to about 0.7% this year.

Capital Economics expects inflation to come closer to 3.5% and GDP growth to reach about 1% this year, and projects the Bank of England could cut rates from 3.75% to 3.0% next year.

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