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UK 10-year borrowing rises above 5% amid PM Burnham cost trade-offs

The BBC Business says the move followed market expectations that Burnham could use “flexibility” in borrowing rules for some categories of spending, including parts of green policy.

Reported · Written up by our desk · Government Bonds

BBC Business reports that UK government 10-year borrowing rose above 5% on Monday, a shift it links to expectations around new Prime Minister Andy Burnham’s cost of living announcements and how they would be funded.

The outlet says Burnham indicated his Tuesday announcements would be paid for, implying either a tax rise or spending cut, and markets also reacted to discussion of possible “flexibility” in borrowing rules.

According to BBC Business, the “flexibility” referenced relates to how certain borrowing by financial institutions is treated, a framework that has appeared in some green energy policies and could potentially extend to housing and other infrastructure.

BBC Business also notes that Burnham’s camp has floated unfreezing the income tax threshold, with unions backing an option that would cost at least £4 billion depending on inflation, while other plans would be more expensive by rolling back freezes beyond current timelines.

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