Andy Burnham arrives in Westminster on 22 June 2026. He alarmed some investors last year, when he said the UK was ‘in hock’ to the bond markets. Photograph: Tolga Akmen/EPA View image in fullscreen Andy Burnham arrives in Westminster on 22 June 2026. He alarmed some investors last year, when he said the UK was ‘in hock’ to the bond markets. Photograph: Tolga Akmen/EPA Andy Burnham Analysis ‘Walking a tightrope’: Burnham’s borrowing plans clash with fiscal realities Alex Daniel The man tipped for No 10 could also come under immediate pressure if his chancellor is deemed by bond markets to be too left-wing
Andy Burnham would enter Downing Street already “boxed in” by financial markets if he signals a rise in borrowing to pay for a more expansive policy agenda, bond investors have warned.
The newly elected MP for Makerfield, who is widely expected to be the next prime minister, could also quickly come under pressure if he chooses a chancellor who is seen to be too leftwing by bond markets.
“He is boxed in by the fact that government finances are in a weak position, and if he chooses to ignore this reality, then he could find himself under pressure very quickly,” said Mark Dowding, chief investment officer at the hedge fund RBC BlueBay.
With Liz Truss’s disastrous mini-budget still casting a shadow over UK fiscal policy, Burnham alarmed some investors last year when he said the UK was “in hock” to the bond markets, a stance he has since moderated in interviews.
Dowding said: “Markets are more prone to be sceptical at the outset if he tries to be too adventurous … from that perspective Burnham could be walking a tightrope partly of his own making. It won’t take too many headlines for the bond markets to suddenly be on its back.”
If he does become prime minister, the former Manchester mayor will be expected to follow through on pledges such as nationalising key utilities and a council housebuilding programme.
How he pays for them remains unclear. During his campaign for the Makerfield seat, Burnham committed to the fiscal rules set by Rachel Reeves , in a signal that he would not oversee a dramatic rise in borrowing.
But he has also committed to Labour’s manifesto promise not to raise income tax, VAT or national insurance, limiting how much he can raise money from taxpayers.
“It is a very challenging backdrop for Burnham to come in against. He needs to deal with what is in front of him, not what he’d like to be inheriting,” said Andrew Goodwin, chief UK economist at Oxford Economics .
“Anywhere he wants to spend more, he’s going to have to either cut spending elsewhere to finance it, or he’s going to have to increase taxes,” he added. “This isn’t a time where you can come in and pursue really big picture ideas.”
On Tuesday, one of the people who has been advising Burnham called for billions of pounds more borrowing to pay for investment in infrastructure.
Jim O’Neill, a former chief economist at Goldman Sachs and minister, said he wanted the government to create an independent body for infrastructure spending that could be freed up to spend significantly more on major projects.
He said: “There is a lot more room under the existing fiscal rules to borrow for investment, and the next chancellor should take advantage of that. We can do way more to boost infrastructure projects, and that is what we should be doing.”
His choice of chancellor will be a key indication of which way things could go, said Jonas Goltermann, chief markets e…