Burnham's first PMQs lands on a 5.27 percent gilt and an October 28 budget

Andy Burnham faced his first Prime Minister's Questions on Wednesday with the 10-year gilt yield at 5.268 percent, the highest since June 2008. Bloomberg later printed a print of 5.29 percent, a level last seen in August 2007. Germany's 10-year yield rose to 3.39 percent, a 2011 high. The move followed the latest round of United States and Iranian strikes and a jump in oil and European gas prices.

Burnham took office in July after Keir Starmer left Downing Street. Parliament was about to rise. Wednesday was the first time he stood opposite Conservative leader Kemi Badenoch at the weekly session. He had spent more than three hours at the despatch box on Tuesday on a statement and questions. MPs returned from the summer recess this week.

The exchange

Badenoch said the prime minister had listed spending plans and had not said how he would pay for them. "The markets are clearly worried that we now have a spendthrift prime minister who wants to say yes to everyone but cannot tell us where the money is coming from," she said. She asked him to name cuts and to explain how he would handle a rising debt stock.

Burnham blamed the Conservative years for the country's exposure to global market swings. He said his first moves had been tax cuts and that he would not "write the Budget" at the despatch box. That document, he said, belongs to Chancellor John Healey. The two men set the Budget for 28 October, an early date chosen, Burnham said, to shorten the period of speculation. He restated three fiscal rules when Conservative MP Jack Rankin asked whether he knew them: no borrowing for day-to-day spending; debt falling as a share of GDP by the end of the parliament; and a yes to holding those rules.

He also said he wants the welfare bill down and is willing to work with Conservatives on that. Labour's defence committee chair used the same session to press him for a 3 percent of GDP defence spend. Burnham did not write that number into the record either.

What the gilt move does to the Budget

Pantheon Macroeconomics told clients that higher debt interest had cut Healey's fiscal headroom to about £13 billion from £23.6 billion in the Spring Statement. The firm said the chancellor now needs about £11 billion a year of tax rises or spending cuts just to put the old margin back. Markets, it added, will stay nervous as the government keeps announcing outlays into October.

The gilt sell-off is not a UK-only event. French and Italian yields rose further than Britain's on Wednesday. The Iran war and the risk to Gulf energy cargoes are the common factor. Britain still pays a premium because its debt stock is large and because a new prime minister and a new chancellor have not yet published a full set of numbers.

The political clock

Burnham used the recess to tour the country and to announce cost-of-living measures. Badenoch's line is that announcements without offsets are the reason the 10-year is at an 18-year high. The test of that claim is the 28 October Budget, not a Wednesday lunchtime. Until then the facts are these: the first PMQs is done, the 10-year printed above 5.26 percent, headroom on one private estimate has fallen by about £10 billion, and the chancellor has eight weeks to show how the rules Burnham recited survive the coupon on the debt.