Faisal Islam: Burnham seeks to manage the markets and Makerfield

Faisal Islam: Burnham seeks to manage the markets and MakerfieldJust nowShareSaveAdd as preferred on GoogleFaisal IslamEconomics editorPA MediaGreater Manchester Mayor Andy Burnham has committed to sticking to the government's existing borrowing limits, known as its fiscal rules. And the markets appear to have reacted.In recent weeks, Burnham had suggested the rules might be changed, for example by exempting rises in defence spending as has occurred in Germany to allow for extra spending.Then on Friday, UK borrowing costs rose amid the possibility of a win, a quick leadership election, and Burnham's coronation as Labour leader as well as global tumult.However, on Monday, the Burnham campaign confirmed to BBC News that was no longer an option.That same day, UK 10-year gilt yield – a measure of the effective interest rate on a 10-year loan to government – fell back, something attributed to Burnham's attempt to calm markets.Bond market expert Mohamed El-Erian said: "These comments from Andy Burnham contributed to this morning's outperformance of the UK bond market. "It makes total sense to clarify his approach at this time of global bond market turbulence."A former minister and Burnham backer told BBC News: "He has committed to the rules as they are. It is totally essential. He understands the cost of borrowing is a huge constraint on government." On Monday, the International Monetary Fund urged the UK to stick to the fiscal rules which continue to shrink government borrowing faster than other major economies.UK borrowing costs rise and pound falls as leadership drama continuesAnalysis: Andy Burnham's route back to Commons is clearer - but can he win in Makerfield?The main fiscal rules limit how much the government can borrow to fund day-to-day public spending and compel the government to ensure that debt as a share of national income is falling by the end of the Parliament, expected in 2029. Over the weekend, Burnham t...