Best of the Spectator Reality Check: Andy Burnham, abolishing the OBR & why Rishi was right
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Feb 1, 2026 James Nation, former Treasury and Downing Street advisor now leading Forefront Advisors, talks markets and fiscal credibility. He explains why Andy Burnham’s bid unsettled bond markets. He discusses how governments must respect financing constraints, the case for fixing the OBR, and why early action on inflation mattered. He also reflects on moving from government to the private sector.
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Markets React To Fiscal Credibility
- Andy Burnham's talk of being "in hock to the bond markets" triggered market moves because investors fear large fiscal expansion in a high-debt UK.
- Markets price political signals about fiscal credibility, not just daily noise.
Debt Markets Are A Practical Constraint
- Being 'in hock' to bond markets is a feature: governments rely on investors to finance spending.
- James Nation warns that governments still must respect financing constraints when planning policy.
Inflation Versus Fiscal Story
- UK yields improved partly because inflation expectations fell, not solely due to fiscal plans.
- Nation argues both inflation and political credibility drove last year's market volatility.