Andy Burnham sent borrowing costs soaring on Monday as he vowed to exploit ‘any flexibility’ in the fiscal rules before naming John Healey Chancellor of the Exchequer.
The yield on ten-year gilts – a key measure of how much it costs the UK government to borrow – rose above 5.04 per cent as investors fretted over the new Prime Minister's tax and spending plans.
That put it back over the 5 per cent level that until this spring had not been breached since 2008 – and well above the levels seen under Liz Truss.
The rise in UK borrowing costs was the fastest in the G7 in what Rupert Harrison, an advisor to George Osborne when he was Chancellor, described as ‘some early warning signs from the gilt market for Andy Burnham’.
It already costs Britain more to borrow than any other country in the G7 as investors demand more to lend to the UK than to the United States, Canada, Germany, France, Italy and Japan.
