{"id":762462,"date":"2026-09-07T02:48:12","date_gmt":"2026-09-07T02:48:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/762462\/"},"modified":"2026-09-07T02:48:12","modified_gmt":"2026-09-07T02:48:12","slug":"chancellor-to-argue-uk-economy-can-turn-corner-despite-bond-market-turmoil-john-healey","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/762462\/","title":{"rendered":"Chancellor to argue UK economy can \u2018turn corner\u2019 despite bond market turmoil | John Healey"},"content":{"rendered":"

John Healey will argue the government\u2019s plans to boost growth across the whole country will enable the British economy to \u201cturn a corner\u201d despite anxiety over volatile bond markets derailing Labour\u2019s crucial first budget.<\/p>\n

The chancellor is expected to argue that fiscal discipline is \u201cindivisible\u201d from good growth, especially at a time of difficult global headwinds, amid concerns that his cautious approach<\/a> jars with Andy Burnham\u2019s more radical policy plans.<\/p>\n

In a speech in the West Midlands on Monday, Healey will set out how the government plans to boost regional economies by easing Treasury bureaucracy and giving more powers to local leaders to drive business investment, innovation and skills.<\/p>\n

But public finances are under pressure from soaring global bond yields, which hit an 18-year high last week, driving up government borrowing costs, resulting in Healey putting Britain on notice<\/a> for a tough 28 October budget.<\/p>\n

Economists have predicted that the chancellor \u2013 who has said he wants a \u201cbuffer against uncertainty\u201d \u2013 will have to put up taxes or cut spending to protect the \u00a324bn fiscal headroom his predecessor Rachel Reeves had last year.<\/p>\n

\u201cFiscal credibility is indivisible from good growth,\u201d the chancellor is expected to say. A Treasury source said this was \u201ctrue at any time, but especially at a time of global uncertainty\u201d amid warnings that Donald Trump\u2019s war in the Middle East would push up inflation and hit public finances.<\/p>\n

Healey will say that, despite the bleak global backdrop, pursuing growth across every region will help unlock \u201chuge latent potential\u201d and show Britain is \u201cturning a corner\u201d, with people, businesses and communities ready to seize the opportunities of new technologies.<\/p>\n

The prime minister argued at the weekend that it would be impossible to build a dynamic economy on crumbling infrastructure, with businesses needing affordable energy and reliable transport, and so more investment would be needed.<\/p>\n

But in a move that will undermine Labour\u2019s efforts to reindustrialise, the UK\u2019s biggest carmaker, Jaguar Land Rover<\/a>, which is based in the West Midlands, was expected to announce thousands of job cuts.<\/p>\n

During a speech at a manufacturing site on Monday, Healey is expected to reiterate that Britain\u2019s growth must extend beyond its biggest cities.<\/p>\n

\u201cThe prime minister laid out a clear diagnosis of what has gone wrong in the past,\u201d he is expected to say. \u201cThe solution is a fundamental shift that starts with putting power in the right places. The next chapter of Britain\u2019s growth story will be written in more places.\u201d<\/p>\n

National government must work with the new No 10 North on a \u201cdual mission\u201d to remove obstacles for local leaders and businesses, he is expected to say. \u201cInstead of getting in the way with complexity and red tape, we need a strong, strategic centre wired to enable local leaders and their ambitions.<\/p>\n

\u201cI want to see wealth creation in this country. I want to see businesses make a profit. And to create the conditions for that we need an active, accountable state at all levels to remove blockages and create the conditions for more investment.\u201d<\/p>\n

Healey wants national government to work with No 10 North on a \u2018dual mission\u2019 to remove obstacles for local leaders and businesses. Photograph: Christopher Thomond\/The Guardian<\/p>\n

Healey will announce that the British Business Bank will allocate \u00a3150m to scale up businesses across the north of England. The pot will offer investments from \u00a35m to \u00a315m to help university spinouts and the expansion of other innovative companies.<\/p>\n

He will underline the government\u2019s commitment to \u201cplace-based\u201d growth, building on Reeves\u2019s attempts to move the focus of the Treasury away from the south-east. \u201cAsk an economist what growth is and you\u2019ll get a number,\u201d he will say. \u201cBut ask the country and you\u2019ll get a different answer.<\/p>\n

\u201cA young person getting a new job in a company that\u2019s on the up. A sole trader winning a new contract that pays for a holiday with their kids. A business winning a new export order, giving the community around it a new lease of life.\u201d<\/p>\n

However, businesses are braced for what they fear will be higher taxes to fill a fiscal hole caused by rising borrowing costs and Burnham\u2019s new spending plans. In an interview with the Financial Times on Saturday, Healey refused to rule out increasing levies on bank profits.<\/p>\n

Healey has also been under pressure over the timeline to hit defence spending targets, after quitting Keir Starmer\u2019s cabinet over the issue. On Sunday, the business secretary, Jonathan Reynolds, indicated the government would spend 3% of gross domestic product on defence by 2030.<\/p>\n

\u201cWe\u2019ve made some clear movements early on to show that direction of travel \u2026 [Healey] has not moved away from the target you\u2019ve said. He said the fundamental target is the 2035 3.5% of GDP on defence spending that is our Nato<\/a> commitment. The trajectory to that covers the 3% but that is the principal target,\u201d said Reynolds.<\/p>\n

Healey, pictured in June, the day before he resigned from his post as defence secretary over military spending plans. Photograph: Tolga Akmen\/EPA<\/p>\n

Robert Jenrick, Reform UK\u2019s economic spokesperson, said: \u201cEven Rachel Reeves had more vision than this guff. Days after a market meltdown, when grip and direction are required, John Healey has revealed himself to be an empty vessel with no idea about how to rescue our economy.\u201d<\/p>\n

Andrew Griffith, the new shadow chancellor, described Healey\u2019s speech as a \u201cpolicy-light word salad\u201d, saying it would do little to comfort families and businesses who were worried about more tax rises or the rates of government borrowing.<\/p>\n

On the BBC on Sunday, Griffith, who was a Treasury minister at the time of Liz Truss\u2019s disastrous mini-budget, said there had been \u201clots of good things\u201d in that fiscal statement \u2013 including tax cuts and cutting regulation \u2013 attracting criticism from Labour.<\/p>\n","protected":false},"excerpt":{"rendered":"John Healey will argue the government\u2019s plans to boost growth across the whole country will enable the British…\n","protected":false},"author":2,"featured_media":762463,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[59,57,58,50,56,54,55],"class_list":["post-762462","post","type-post","status-publish","format-standard","has-post-thumbnail","category-united-kingdom","tag-gb","tag-great-britain","tag-greatbritain","tag-news","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/762462","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=762462"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/762462\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/762463"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=762462"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=762462"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=762462"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}