Andy Burnham has insisted he is prepared to take “difficult decisions” on the economy, after a former Bank of England chief economist said investors were worried about his willingness to cut spending.
Speaking on Tuesday, Andy Haldane, who has advised Burnham on the economy, claimed financial markets had grown wary of his economic plans and now considered his premiership a “traditional tax and spend socialist government”.
But the PM rejected this, adding that he would not take risks with the economy and had already made difficult choices since taking office.
It comes as recent rises to the cost of UK borrowing worsened the political options facing the government ahead of next month’s Budget.
Haldane said the prime minister’s was facing a “straight choice” between raising taxes and cutting spending at the yearly spending statement due on 28 October.
In an interview with LBC, he urged him not to raise taxes further, but said investors were questioning whether he was prepared to risk anger from Labour backbenchers by making reductions in public expenditure.
“The fiscal Achilles Heel of this government thus far has been its unwillingness and/or inability to cut public spending,” he told the radio station.
“Within financial markets, we’ve gone from the cautious optimism of the summer months to the studied scepticism of September. The market now suspects that this is a traditional tax and spend socialist government with better TikTok videos.”
