UK's Burnham rows back on bond comments, won't rejoin EU
By Frank Prenesti
Date: Monday 18 May 2026
(Sharecast News) - Potential UK leadership challenger Andy Burnham started to set out his vision for Britain, saying he would observe current fiscal rules on spending, but called for renationalisation of major utilities such as water, and ruled out rejoining the European Union.
UK bond yields eased slightly on Monday after Burnham on the weekend rowed back from past criticisms that Britain was "in hock" to debt markets, saying he was committed to the government's current fiscal rules and reducing the UK's debt levels.
Burnham's comments came as the International Monetary Fund called on Britain to "stay the course" to cut government borrowing and warned the risks to the economy were tilted to the downside with the risk that "domestic uncertainty could also add to the already volatile global environment".
It also reminded policy makers that Britain was constrained by tough "economic realities" that would limit room for any radical changes.
"Today's policymaking is constrained by a more volatile external environment with more frequent and overlapping shocks; a rising public interest bill in part reflecting market concerns with countries' elevated debt, and the longstanding challenge of weak productivity growth," said Luc Eyraud, the IMF mission chief to the UK.
Britain's rising borrowing costs are expected to add to the government's debt servicing costs, with £100bn-a-year already being paid in interest or £1 out of every £10 spent by the Treasury.
Eyraud said the government had "limited fiscal space" to respond to the economic shock from the Iran war, which he warned would stoke inflation and drag down activity later this year.
The prospect of a more left-leaning labour administration and higher spending sent yields surging to three-decade highs last week, although the likelihood of any splurge given the parlous state of Britain's finances was extremely remote.
Speaking in the seat of Makerfield, where the incumbent MP Josh Simons stood aside for the Greater Manchester mayor to make his run, Burnham said he would not try to rejoin the EU, saying Britain would be stuck in "a permanent rut if we're just constantly arguing".
"Let's fix our own country. Let's get it working again. Let's get it back to where people want it to be," he said.
The comments came after potential leadership rival Wes Streeting said he was in favour of rejoin the EU, his first major intervention since resigning as health secretary, adding that he would stand in any formal leadership contest.
Meanwhile on Monday Starmer rejected suggestions his premiership was effectively over given Burnham's plans now, in effect, over, given that Andy Burnham is tipped to replace him later this year.
In a media interview where the question was posed Starmer said: "No, we've got a lot of work to do and I was addressing Labour party staff actually, this morning reminding them, and reminding the whole team really, that we were elected into office by millions of people, to bring about change in this country."
"That's our responsibility. my responsibility is to serve the people who voted us into office, serve my country."
Reporting by Frank Prenesti for Sharecast.com
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