Opinion · Gulfs Weekly
UK economy 'turning a corner' but fiscal discipline remains 'first priority' - Healey published at 10:04 BST Healey says when he spoke to his colleagues at the G20 he told them a "fresh" and "optimistic" story of Britain - a country "turning a corner". He says UK businesses and communities are ready to seize the opportunity of new technologies and ideas. Since the election in 2024, interest rates have been cut six times, Healey adds, and productivity is finally taking off after "decades of lagging behind" its peers.
From day one as chancellor, he says fiscal discipline was his "first priority" and he and both the PM are committed to meeting the fiscal rules at the Budget, controlling borrowing, and reducing long term pressures on public finances. He says if debt interest were a government department it would be the second biggest in Whitehall after health, bigger than defence, home office and justice put together. "That's why staying true to our values means being honest about the need to control government spending." Chancellor acknowledges tricky backdrop as he says he has to 'reestablish belief in Britain' published at 10:01 BST Faisal Islam Economics editor Here at the speech in Coventry, the chancellor is surrounded by industrial robots and with manufacturing apprentices directly in front of him.
He started by directly acknowledging the tricky backdrop. “These shocks may be worldwide, but they are felt keenly here in the UK. From the cost of the weekly shop to the cost of Government debt, our borrowing costs are too high”.
He blamed that on political chaos seen in recent years. He said he had a responsibility to “reestablish belief in Britain and the UKs fiscal sustainability”. Healey says austerity, Brexit and Truss' mini-Budget key contributors to higher costs published at 09:58 BST Image source, UK Pool Healey says financial shocks such at trade tension and rising inflation "may be worldwide, but they are felt keenly here in the UK".
He says borrowing costs are at "historic highs" and that the reasons for it are "high borrowing and low growth" allowing national debt to rise to almost 100% of GDP. "[David] Cameron's austerity gutted our public services while [Boris] Johnson's hard Brexit hammered goods exports," he says. He adds that unfunded spending after Covid "meant inflation hit 11%", which increased the cost of living and the cost of business.
The chancellor adds that the cost of debt for G7 nations were historically about "average" until the Liz Truss Budget "crashed the economy". "Since 2022 we have been paying that Truss penalty as we battle to re-establish belief in Britain," he adds. UK stock market 'hitting all time highs', says Healey published at 09:54 BST Chancellor John Healey starts off saying he is proud to back the Manufacturing Technology Centre (MTC) and is pleased to be here to deliver his first speech.
He says MTC is part of advanced manufacturing and a fitting place to speak about "this government's determination" for growth. "We're world leaders in life sciences, defence technology, creative industries, financial services," he says. He calls the UK's science and research base "world beating" and says the UK stock market is "hitting all time highs".
He adds that his new job has taken him in the past week to the G20 meeting in North Carolina. He says he was "proud" to have behind him the work begun by Keir Starmer and Rachel Reeves. "I will build on both as chancellor," he says.
John Healey delivers first major speech as chancellor - watch live published at 09:45 BST Image source, UK Pool John Healey is now delivering his first major speech since taking the role of chancellor in July. Tap watch live to follow along at the top of the page - we'll also bring you the key lines here. Chancellor's speech will try to boost confidence amid challenging markets published at 09:40 BST Faisal Islam Economics editor Ahead of his first speech as chancellor, the backdrop has been testing.
Turmoil in global markets for government borrowing has pushed up costs. A few miles from the speech, Britain’s biggest manufacturer, is poised to announce thousands of redundancies . Even this morning, one of the main housing market measures showed a dip in prices for the first time in three years.
And yet surrounded by giant advanced manufacturing robots, the chancellor will strike an upbeat note containing references to optimism, resilience, grit, and that perennial economic phrase about turning a corner. There is some substance in better economic numbers than other major economies so far in 2026. The PM's attempt to strike a more positive tone - alongside the weather and World Cup - has also led to some better readings on consumer and business confidence, including from all important recruiters, albeit from a low base.
At the equivalent speech for the past two years, the public has been left with a clear message of tough times, and significant tax rises ahead. Not today. The chancellor is trying to nurture some fragile early signs that confidence is returning.
The burning question is how to fill multi billion gaps in public finance plans before the Budget, in a way that minimises the economic impact. While vibes are important, policy matters more. JLR expected to announce thousands of job cuts, as chancellor delivers first major speech published at 09:29 BST Image source, Getty Images John Healey's first major speech as chancellor will be delivered in Coventry in the next half hour.
Just down the road, Jaguar Land Rover is expected to announce thousands of job cuts to save costs following competition from China for cheap cars, US tariffs on UK vehicles and the after effects of a cyber attack. The company did not confirm the numbers but the Times reported as many as 4,000 jobs may be lost due to the impact of tariffs and a drop in sales. Business Secretary Jonathan Reynolds has already ruled out any government bailout and will meet leadership this week with the aim to "mitigate any job losses".
Chief Secretary to the Treasury Emma Reynolds told Radio 4's Today programme her thoughts were "with the workforce", adding: "We have yet to see the final announcement from the company". She said the business secretary was “working closely” with JLR’s leadership and trade unions. Yield on 10-year loans to government reach highest rate since financial crisis published at 09:20 BST Andy Burnham will be facing increasing pressure ahead of next month's Budget after long-term government borrowing costs reached a 18-year high last week.
The yield on the benchmark 10-year gilt also rose to 5.22% - the highest rate since the height of the global financial crisis in June 2008. The yield on a 30-year gilt - a loan to the British government - rose to 5.89%, the highest since 1998. Borrowing costs in the US, Japan and Europe have hit similar highs in recent days, reflecting investors' concerns about inflation, state borrowing levels and spending levels by large tech companies on AI.
What Andy Burnham has said on economic growth published at 09:07 BST Prime Minister Andy Burnham has called for "good growth in every postcode", arguing last week that "Britain is not where we would wish it to be". Burnham says he plans to devolve power form Whitehall to other parts of the UK, including Manchester and other cities outside the capital. He argues that this would boost the standard of living for families beyond London.
"From the 1980s, this country took a series of wrong turns," Burnham told the Commons during his first PMQs last week. "Political power was centralised, economic power privatised, the country deindustrialised, austerity followed, hollowing out councils and depriving them of the agency to act to reverse any of this," he added. "And then Brexit compounded the damage, ushering in a decade of low growth and stalled regeneration." Economy 'turning a corner' but growth 'not as high as we'd like', says chief secretary to Treasury published at 08:55 BST Image source, EPA Image caption, Chief Secretary to the Treasury Emma Reynolds pictured earlier this year Chief Secretary to the Treasury Emma Reynolds tells Radio 4's Today programme the UK economy is "turning a corner" with growth better than other leading economies, although "obviously not as high as we'd like it to be".
"No one would say the economy is doing well," the BBC's Nick Robinson challenges. "I beg to differ," Reynolds says. Reynolds says Healey will use his speech this morning to announce plans to help the sectors of the future, including support for businesses in the north of England to "drive growth in every postcode".
On next month's Budget - and whether Healey has pushed departments to find cuts - she says she is "not going to speculate on the Budget or write it on air". Pressed on the economic challenges the government is facing , Reynolds says the chancellor has made it clear "fiscal discipline and stability is his first priority". She says the UK is cutting its deficit "at a faster rate than any other leading world economy", adding that Healey has written to "every cabinet member" reinforcing that "we have to live within our means" - and that any new priorities must be funded by cutting spending in other areas.
What economic challenges does the government face? published at 08:44 BST Image source, UK Parliament The cost of government borrowing has risen sharply in recent months, partly reflecting concerns about inflation. It could put pressure on Prime Minister Andy Burnham and Chancellor John Healey as the Autumn Budget approaches. In his first speech in the House of Commons as PM, Burnham said his government's "bedrock" would be "fiscal responsibility" as it seeks to tackle the cost-of-living crisis.
But higher borrowing costs reduce the amount of headroom - or flexibility - the government has for spending on things like measures to ease the cost of living. Jim O'Neill - a former key adviser to Burnham - said last week that the Budget would have to include either spending cuts or "some form of tax increases" in order to restore the government’s "headroom". Defence spending is another challenge, with the government under growing pressure to reach a target of 3% of GDP by the end of the decade.
Burnham has pointed to his choice of chancellor as proof of his commitment to defence investment - Healey resigned from Keir Starmer's government in June over a defence spending row. Chancellor to unveil £150m fund for northern businesses published at 08:40 BST Image source, EPA In the next hour, we're also expecting Chancellor John Healey to unveil a £150m fund for companies in the north of England, part of the government's wider plan to stimulate economic growth across the UK. The government will use public investment to "unlock private investment, to support our innovation economy, and to create the new jobs their areas need", Healey will say.
The fund, drawn from money already allocated to the British Business Bank, will provide investments of between £5m and £15m to the "most innovative and fast-growing firms". It is expected to back university spin-outs and other "ambitious businesses" across the north. John Healey to deliver first major speech as chancellor published at 08:35 BST Chancellor John Healey will deliver his first major speech on economic growth this morning.
Healey is set to give an upbeat view of the state of the UK economy ahead of next month's Budget, building on a recent uptick in consumer and business confidence. The chancellor will talk of a "new story" of the economy not just turning a corner but being resilient, optimistic and "ready to seize the opportunities of new technologies and ideas". It comes at a challenging time, with UK borrowing costs having surged in recent months - partly in response to inflation fears.
Borrowing costs around the world have also been rising. As he prepares to deliver his Budget on 28 October, Healey has said he is as committed to balancing the books as his predecessor, Rachel Reeves. But higher borrowing costs could limit the amount he is able to spend on consumer-friendly measures to ease the cost of living.
You'll be able to watch the speech live at the top of the page from 09:30 BST as we bring you his top lines and analysis from our correspondents. Image source, PA Media
Source: BBC
