Healey Vows a ‘Fiscal Buffer’ as Gilt Yields Hit a Two-Month High
The Chancellor, John Healey, has used his first big set-piece in the City to pledge disciplined public finances, telling executives at Bloomberg’s London headquarters that he would meet the government’s fiscal rules “with a buffer against uncertainty”. Markets were unmoved: the thirty-year gilt yield climbed towards 5.75 per cent, a two-month high, and the ten-year held above 5 per cent, keeping British borrowing costs the dearest in the G7.
On his third full day in post, Mr Healey said he and the Prime Minister would “work in lockstep” to steady the public finances, and struck a pro-business note, saying he was “just as concerned about the cost of business as about the cost of living”. Investors remain wary after Mr Burnham’s talk of seeking “flexibility” within the fiscal rules unsettled the bond market earlier in the week. With debt-interest costs running towards £110bn a year and the autumn Budget looming, the Chancellor has little room for manoeuvre. Watch the gilt market’s reaction and the Bank of England’s rate decision on 30 July.