Former Bank of England Economist Warns of Risks Ahead of Britain's Budget
Andy Haldane told CNBC that Andy Burnham's government must cut public spending to avoid a bond market crisis.
Former Bank of England Chief Economist Andy Haldane described the UK's financial position as "very precarious" ahead of the autumn budget, which will be presented on 28 October. According to him, without cutting public spending, Prime Minister Andy Burnham will remain "at the mercy" of the bond market, where the yield on British government bonds (gilts) is now the highest in the G7.
Haldane noted that Britain is particularly vulnerable due to high inflation, low growth, and a chronic budget deficit. He supported the abolition of the "triple lock" on pensions but warned that markets expect clear measures from the government to reduce spending on social benefits. Chancellor of the Exchequer John Healey has already announced plans to create a "financial buffer" in case of crises but did not disclose how this would be achieved.
The press is discussing possible tax increases, including for banks. However, Haldane urged not to overburden businesses: in his view, the private sector already considers the tax burden excessive, and further increases could slow economic growth.
