UK Prime Minister Burnham said the government’s upcoming budget, due Oct. 28,
will be "challenging", marking a shift from his earlier growth-optimistic tone.
Officials had planned a modest package focused on cost-of-living relief, lower
business costs and devolution, but a deteriorating global backdrop—notably
Middle East hostilities that have pushed energy prices higher—has raised
inflation and gilt yields, increasing borrowing costs. August inflation rose to
a five-month high, keeping the Bank of England rate path under scrutiny.
Economists estimate rising yields could cut the £23.6bn fiscal buffer under
fiscal rules by about £12bn. Chancellor Healy said the economy shows resilience
and the government will continue to pursue growth while taking difficult
decisions to preserve stability.
