UK Chancellor John Healey delivered his first major speech since taking charge of the Treasury on Monday, insisting the UK economy was “turning a corner” even as he acknowledged the growing burden of high government borrowing costs on businesses and the public finances.
Speaking at the Manufacturing Technology Centre in Coventry, Healey set out his economic priorities ahead of his first Budget as chancellor, due to be delivered on 28 October, promising it would be “built on fiscal discipline.”
John Healey News: What did Healey say about the state of the economy?
Healey sought to offer an optimistic assessment of Britain’s economic prospects despite what he acknowledged were significant global headwinds, including the war in the Middle East and Russia’s ongoing invasion of Ukraine. He described the country as having “huge latent potential,” calling it “a country turning a corner, a country whose people, businesses and communities are ready to seize the opportunity of new technologies and new ideas.”
John Healey News: Why are borrowing costs under such scrutiny?
The speech came after UK borrowing costs rose again last week, with interest rates on 10-year government debt reaching an 18-year high. Healey directly addressed the pressure this has placed on the public finances, saying the rising burden of debt interest meant that “staying true to our values means being honest about the need to control government spending.”
John Healey News: What commitments did he make ahead of the Budget?
Healey pledged that next month’s Budget would demonstrate a clear commitment to fiscal discipline, telling the audience: “The Prime Minister and I are in lockstep in our commitment to meeting the fiscal rules at the upcoming Budget, to balancing the books with a buffer to protect against uncertainty.” He said this would mean “controlling borrowing to bear down on inflation and reducing long-term pressures on our public finances.”
John Healey News: What new funding did he announce?
Alongside his broader remarks on fiscal policy, Healey used the speech to announce a £150 million fund aimed at supporting fast-growing firms in the north of England, part of what he framed as a wider effort to help regional businesses expand and create jobs. He also outlined plans to extend the government’s reforms of judicial review processes beyond energy projects, a move intended to speed up decision-making on infrastructure and development schemes.
John Healey News: How does this fit into the wider political backdrop?
Monday’s address marked the first major set-piece economic speech since Andy Burnham entered Downing Street as prime minister, with Healey having taken over at the Treasury from Rachel Reeves on 20 July. The change in Treasury leadership comes at a delicate moment for the government, with borrowing costs at their highest level in nearly two decades and pressure mounting on ministers to demonstrate a credible path back to fiscal stability ahead of the Budget.
John Healey News: What challenges lie ahead before the Budget?
With just over seven weeks remaining until Healey delivers his first Budget, the chancellor faces the task of squaring his pledge to control public spending and meet the government’s fiscal rules against continued calls for investment in growth and public services. How convincingly he manages that balance is likely to shape both market confidence in the run-up to 28 October and the broader political reception of the new Treasury team’s economic strategy in the months ahead.
