UK's Andy Burnham fully rules out changing Chancellor Reeves’ fiscal rules if he becomes PM
- At the weekend his team had left it open whether he might change them in future
- But tonight his spokesperson tells Bloomberg he is explicitly ruling out any changes to the existing fiscal rules
- AND crucially Burnham is now also ruling out exempting defence spending from the fiscal rules to spend more on the military
- He had floated that idea in a Bloomberg interview a few weeks ago, but his spokesperson tonight says he won’t pursue it
- This is a big attempt by Burnham’s campaign team to reassure markets that were spooked on Friday by his potential premiership
- But it may risk disappointing some on the left who had hoped for a more radical fiscal policy.
- It may also mean tax rises are the likely main revenue raiser in the event that Burnham wants to increase spending
Context
Burnham's clear commitment to maintaining existing fiscal rules is an effort to stabilize market sentiment following recent volatility. By ruling out exemptions for defense spending, it signals a more cautious approach to fiscal policy, potentially dampening expectations for expansive spending. This could steer investor perspectives towards potential tax increases as a means of financing any public spending increases, impacting GBP and broader market sentiment accordingly.
Trade the TapeGet this analysis live, the moment it breaksNewsquawk's real-time dashboard delivers market-moving headlines and instant context to your desk before the rest of the market reacts.
Open Dashboard#UNITED STATES#USD#JAPAN#GBP#EUROPE#GBP/USD#IMPORTANT#FOREX#EU SESSION#US SESSION#DXY#GLOBAL NEWS