Paul Dales, UK economist at Capital Economics, said bond markets were under pressure in general given the hostilities in the Middle East and movements in energy prices, but that the tone of Burnham’s comments was adding to the decline in gilts. “There is a danger that Andy Burnham is falling into the same trap as Rachel Reeves and Keir Starmer” when they took office, he argued, pointing to the first Budget at which Labour loosened fiscal policy. Given the prospect of rising inflation, easing fiscal policy further in the near term could push prices up even higher, Dales said. “We are in a situation where inflation is probably going up because of the war in Iran and loosening fiscal policy in that environment would only exacerbate that.”