Andy Burnham has pulled off the trick of pleasing both progressive economists and City investors with his latest speech as frontrunner to become the next UK prime minister.
Positive Reactions from Key Figures
This morning’s speech received a positive reaction from think tank The New Economics Foundation and from asset manager Aberdeen Investments. Alex Everett, investment director for rates management at Aberdeen Investments, said: “An assured and optimistic speech from Burnham, albeit light on detail. Most importantly for gilt investors, he underpinned his announcements with a renewed commitment to fiscal responsibility. This was supported by an ambition to reduce the UK’s welfare bill – a politically difficult topic which signals some willingness to take challenging decisions. While the speech was growth-focused, these offsets should provide the gilt market with near-term reassurance that a Burnham government would be mindful of fiscal constraints as well as political priorities. With such a focus on investment and improvement spending, the re-affirmation of prudence was welcome at this relatively early stage.”
Market Response
As flagged earlier, UK government borrowing costs have fallen slightly – a sign the speech went down well with the markets. Danny Sriskandarajah, chief executive at the New Economics Foundation (NEF), expressed hope that Burnham can deliver his vision of an economic reset, saying: “This morning’s speech sets out a hopeful vision for people-powered success. Three things stood out as particularly welcome: calling time on trickle-down economics, upping the need for public intervention when markets fail and shifting power to people and communities. At a time of rising inequality it is good to hear Andy Burnham go beyond aggregate growth being a defining mission and instead focus on good quality, equitable growth. His ambition to set out a 10 year plan for bringing essential services like water, housing, energy and transport back under public control is much needed. And the promise to modernise an insufficiently accountable state and nurture a more collaborative politics will be welcome at a time of falling trust and growing division. None of this will be easy and the proof will be in the policy, but it has the makings of the economic and political reset the UK needs.”
