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“Medium-term borrowing costs for the UK government hit a fresh 19-year high on Thursday, as investors continued to offload global bonds amid fears of rising inflation.”

“Three weeks ahead of John Healey’s budget, the Joseph Rowntree Foundation said Britain faces a “dire” outlook unless the government takes “bold policy action”.”

“The yield on five- and 10-year UK bonds also rose, driving up the government’s borrowing costs and adding to the pressure on the chancellor, John Healey, before the budget later this month.”

“It is a brave party leader who is prepared to go into an election promising a multibillion-pound new public service – likely to be funded by tax rises or holding back increases in the state pension.”

“A series of global economic shocks, including the Iran conflict, have put the UK economy under intense inflationary pressure and pushed up borrowing costs, leaving the government limited room for manoeuvre.”

“It is unclear if taxes or borrowing would have to rise, or other government spending cuts.”

“But Healey refused to recommit to the interim target when he was appointed to the Treasury by Burnham a month later, raising questions that the new government was backloading spending increases until after the next election.”

“It may be even more controversial given that a pay measure which has been boosted by public sector wage awards is helping drive up the state pension bill at the same time as the government is already under pressure to contain spending and borrowing.”

“In general, suburbs that previously recorded the biggest price increases also cooled the fastest.”