UK Prime Minister Burnham faces questions on borrowing costs and fiscal plans at first PMQs

Prime Minister Burnham answered questions from MPs in his first Prime Minister's Questions session since taking office in July, as the cost of borrowing for the United Kingdom rose to its highest level in 18 years. Treasury Secretary Angela Badenoch asked the prime minister to specify how his spending programme would be financed, warning that markets were concerned about a "spendthrift" leader without a clear funding plan.

Burnham said his initial actions had been tax cuts, including a reduction in VAT on energy bills and lower business rates for hospitality firms, and noted that he and Chancellor John Healey had scheduled the Budget for October to reduce market speculation. He added that the government would adhere to fiscal rules while seeking to ease cost-of-living pressures.

Badenoch cited comments from economist Lord Jim O'Neill, who praised Burnham’s first five weeks for boosting consumer and business confidence but warned that rising interest rates could force the government to address pension and welfare spending. She also highlighted O'Neill’s view that Burnham’s recent Commons statement was unsettling for investors.

The yield on 10-year UK government bonds reached its highest level since 2008, and the 30-year yield hit a peak not seen since 1998, indicating higher borrowing costs for the Treasury ahead of the upcoming Budget.

Burnham responded that he does not always agree with Lord O'Neill and criticized the shadow cabinet reshuffle for bringing back members of the former Conservative administration that had overseen the short-lived 2022 mini-budget.