The spending could technically fit within the fiscal rules set in the Starmer era, because investments in assets can offset costs on the government’s balance sheet. “As such, gilt yields are likely to continue to tread higher, and the debt servicing level will remain substantial.” Ten-year gilt yields rose to 4.97 per cent after Burnham’s first speech as prime minister in July. Borrowing costs could rise higher on the back of elevated gilt yields if the conflict in the Middle East produces an inflationary squeeze. He predicted that bond investors could demand higher interest payments on long-term bonds as worries over the new government’s fiscal stance bubble up.