Faisal Islam: Burnham seeks to calm markets by committing to fiscal rules
Summary
Greater Manchester Mayor Andy Burnham has promised to follow the UK government's current borrowing limits, known as fiscal rules, to help calm financial markets. This commitment came after recent market concerns about potential changes to these rules and political uncertainty.Key Facts
- Andy Burnham, Mayor of Greater Manchester, committed to keeping the government's existing borrowing limits.
- Fiscal rules restrict how much the government can borrow and aim to reduce debt by 2029.
- Market borrowing costs rose recently amid fears Burnham might change these rules.
- Burnham's campaign said changing the rules is no longer being considered.
- UK 10-year government bond yields fell after Burnham's statement, indicating market relief.
- The International Monetary Fund supports the UK sticking to fiscal rules to reduce borrowing.
- Global events, like the US-Israel war and issues in the Gulf, have increased borrowing costs worldwide.
- Burnham wants to invest in infrastructure like housing and transport but may face tough spending or tax decisions due to the fiscal rules.
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