Andy Burnham’s return to the House of Commons was overshadowed by a bond market warning he once said this country should ignore. The yield on the ten-year gilt has hit its highest level since 2008, and the longer-dated thirty-year yield is trading at levels not seen since 1998, as markets pass an uncomfortable verdict on the state of public finances.
Andy Burnham gilt yields and the scale of the borrowing problem
The numbers behind the Andy Burnham gilt yields story are hard to brush aside. According to the Bank of England, the ten-year gilt yield rose by around 20 basis points from the start of January to its peak in early September 2025, reaching 4.8%. The thirty-year yield climbed by around 50 basis points over the same period, hitting 5.7% at its peak. Thirty-year gilt yields ended 2025 at their highest levels since the turn of the century, the Bank of England noted.
Against that backdrop, the national debt is approaching £3 trillion, and debt interest is running at more than £130bn a year. Burnham had previously said this country should not be in hock to the bond markets. The markets, it turns out, were not listening.
Goldman Sachs has linked the surge in gilt yields partly to questions about who will lead Britain’s government and the future direction of fiscal policy, following Labour’s significant losses in local elections. That combination of political uncertainty and weak fiscal discipline is precisely the kind of signal that pushes long-term borrowing costs higher and leaves less room for the spending commitments a new prime minister might prefer to make.
A confident debut, but at odds with current conditions
Burnham delivered what observers described as a confident performance to MPs. He told the House that ‘Britain is not where any of us would want it to be’, which few would dispute. The remedy he outlined, however, pointed toward more public spending, a larger state, and higher taxes. Growth, he said, would follow a ‘triple helix approach to economic development’, a model built on collaboration between the state, universities, and the private sector, reinforced by an empowered tier of local government.
Among the specific policies aired was an ‘overnight visitor levy’, which Burnham presented as an example of fiscal devolution. Whether local areas will be able to use similar devolved powers to reduce the tax burden, as the Tory mayor of Tees Valley has indicated he would like to, is another matter. The answer, on current indications, is no.
Economists expect the modest growth seen in the first half of this year to fall away in the second half. An agenda centred on subsidies, nationalisations, and a reorganisation of Whitehall is unlikely to arrest that slide. Restoring private-sector confidence to hire and invest, alongside a credible plan to bring spending under control and lower the overall tax burden, remains the more pressing task.
Meanwhile, the Chancellor, John Healey, was reported to have emailed all staff at HM Treasury, including those in the IT department and civil service apprentices, asking for ideas ahead of his first Budget. Healey was said to look, in the words of those present, a little under the weather as he sat beside the new Prime Minister during the Commons appearance. Whether that reflected the state of the public finances or simply the demands of the day is not recorded.
The thirty-year gilt yield ending 2025 at its highest level since the turn of the century is not an abstraction. It feeds directly into the cost of refinancing existing debt and into the interest bill that now runs past £130bn annually. Any credible growth strategy has to reckon with that constraint before it can deliver much else. Burnham’s optimism is a change in tone from his predecessor, but the gilt market has heard tone before.
