Healey to pitch growth push as UK faces bond-market strain ahead of budget
Britain’s chancellor, John Healey, will try on Monday to convince voters and investors that the economy can still “turn a corner” even as soaring global
Britain’s chancellor, John Healey, will try on Monday to convince voters and investors that the economy can still “turn a corner” even as soaring global bond yields push up borrowing costs and rattle the government’s plans ahead of a crucial 28 October budget. He will argue in a speech in the West Midlands that Labour’s answer is tighter fiscal discipline paired with faster growth.
The message comes at a tense moment. Last week, global bond yields hit an 18-year high. That has fed anxiety inside government that volatile markets could squeeze room for manoeuvre in public finances and complicate Labour’s first budget.
Discipline first, then growth
Healey is expected to say that fiscal discipline is “indivisible” from stronger growth, particularly as the UK faces difficult global headwinds. The line is aimed squarely at calming nerves in markets. It is also a political signal.
Some in Labour are watching closely for signs of friction between Healey’s cautious approach and the more radical economic ideas associated with Andy Burnham. For now, the chancellor is putting the emphasis on restraint, not big-ticket promises. Careful. Deliberate. Measured.
West Midlands pitch
In the West Midlands, Healey will set out how the government plans to lift regional economies by cutting through Treasury bureaucracy and handing more powers to local leaders. The aim is to help drive business investment, innovation and skills outside London and the south-east, where much of Britain’s economic power remains concentrated.
That message matters beyond Britain. Governments across Europe and North America are under similar pressure to show that growth can be spread more evenly, not just delivered through the capital city. Healey’s pitch is that local decision-makers can move faster than central departments and unlock projects that are too often stalled by Whitehall.
Markets and the budget clock
But the financial backdrop is unforgiving. Rising global bond yields have made government borrowing more expensive, narrowing the space for policy choices just as Healey prepares his first major budget. He has already warned that he wants a “buffer against uncertainty”.
Economists have been expecting a tough autumn. The budget is still weeks away, but markets are already setting the tone. If borrowing costs stay high, the pressure on spending plans will rise with them.
That leaves Healey with a familiar problem for finance ministers everywhere: persuade investors that the public books are under control while convincing households and businesses that growth will follow. The first test comes Monday, in a speech meant to show the government can keep its nerve. The next one arrives on 28 October.
