Andy Burnham has managed to please both progressive economists and City investors with his latest speech, which has been met with positive reactions from the New Economics Foundation and Aberdeen Investments.
Investor reaction: assured but light on detail
Alex Everett, investment director for rates management at Aberdeen Investments, described the speech as “an assured and optimistic speech from Burnham, albeit light on detail.” Everett noted that Burnham underpinned his announcements with a renewed commitment to fiscal responsibility, including an ambition to reduce the UK’s welfare bill. “While the speech was growth-focused, these offsets should provide the gilt market with near-term reassurance that a Burnham government would be mindful of fiscal constraints as well as political priorities,” he added.
Market response: borrowing costs fall
UK government borrowing costs fell slightly following the speech, indicating a positive market reception. This suggests that Burnham’s reaffirmation of prudence was well received by investors.
Think tank support: a hopeful vision
Danny Sriskandarajah, chief executive at the New Economics Foundation, welcomed Burnham’s vision for an economic reset. He highlighted three key points: calling time on trickle-down economics, emphasizing public intervention when markets fail, and shifting power to people and communities. Sriskandarajah also praised Burnham’s focus on equitable growth and his ambition to bring essential services like water, housing, energy, and transport back under public control. “None of this will be easy and the proof will be in the policy, but it has the makings of the economic and political reset the UK needs,” Sriskandarajah said.
Balancing growth and fiscal responsibility
Burnham’s speech focused on growth while also addressing fiscal constraints. By committing to the current fiscal rules and aiming to reduce the welfare bill, he signaled a willingness to take challenging decisions. This approach has provided near-term reassurance to the gilt market, balancing political priorities with fiscal prudence.
