Key facts
- Andy Burnham warned the upcoming Budget will be challenging.
- Burnham rejected the label of a "socialist with better TikToks".
- He stated difficult decisions have been made and will continue to be taken.
- Inflation rose to 3.1% in the year to August.
- Oil prices are at $108 a barrel.
- Energy bills may increase by 25% in January.
Andy Burnham has warned that the upcoming Budget will be "challenging" due to global economic instability, particularly the situation in the Middle East. He pushed back against criticism from former Bank of England chief economist Andy Haldane, who suggested the government was perceived as a "socialist with better TikToks" and lacking commitment to curbing spending.
Burnham stated that difficult decisions have already been made and will continue to be taken to keep the economy on track. He cited reprioritizing government spending and putting digital ID on hold as examples of such decisions. The Chancellor, John Healey, is expected to exercise "the highest degree of prudence" in the Budget.
Official figures released show that headline CPI inflation rose to 3.1% in the year to August, up from 2.9% the previous month. This increase was in line with expectations, but economists warn it could be the start of a trend. Oil costs have surged, with Brent Crude at $108 a barrel, and drivers are facing diesel prices at a four-year high. Energy bills are estimated to rise by a quarter in January, adding to the government's fiscal challenges.
Some analysts predict CPI could reach 4% next year, with markets pricing in multiple interest rate increases as the Bank of England attempts to prevent a spiral. The Monetary Policy Committee is expected to hold interest rates at 3.75% at its upcoming meeting.
Haldane, a former Bank of England chief economist, had previously advised Burnham and expressed disappointment over the perceived lack of commitment to curbing spending, suggesting bond market investors would continue to drive up borrowing costs.