Andy Burnham and John Healey have received a warning from Oxford Economics analysts regarding the use of an "accounting trick" to increase government borrowing. The caution comes amid volatility in bond markets and scrutiny from traders concerning additional gilt issuance.
Oxford Economics suggests the government may use extra borrowing through bodies such as the British Business Bank and the National Wealth Fund. This would fund increased infrastructure and housing investment via 'Pufins', or public financial institutions, allowing additional borrowing to bypass strict fiscal rules on debt and the budget balance.
Economists at the consultancy stated this approach could be risky for public finances. They predict that higher long-term gilt yields, driven by a global bond market rout, could increase government costs by up to £9bn more than anticipated. Andrew Goodwin, an Oxford Economics researcher, commented that using such a method to significantly loosen policy would be "risky given the current febrile bond market backdrop."
Goodwin also warned that the use of Pufins could "threaten the credibility" of John Healey's commitment to fiscal prudence. Polling by City AM/Freshwater Strategy, conducted between 4-6 September 2026, indicated that 73% of 1,249 eligible UK voters are concerned about the impact of rising interest rates on long-term government borrowing.