Jim O’Neill has urged Andy Burnham to focus on reducing 10-year UK gilt yields by 150 basis points to bring down mortgage rates, rather than directly trying to improve growth prospects in every part of the country.
Speaking to the Centre for Cities, O’Neill suggested Burnham risked overpromising and creating problems for himself with the approach. He said: “I am not a huge fan of ‘growth in every postcode’.”
Gilt yields and mortgage rates
O’Neill said the best way to achieve growth in every postcode would be to reduce 10-year gilt yields by 150 basis points, with the fall reflected in mortgage rates.
He said most people would interpret “growth in every postcode” as a plan to focus directly on improving growth in every area, adding: “good luck with that strategy”.
O’Neill said directly pursuing growth in every postcode would almost definitely result in some taxpayers’ money being wasted and create political questions for the government.
Borrowing costs and the fiscal buffer
The 10-year gilt yield, the benchmark for government borrowing costs, rose from around 4.65 per cent in April to more than 5.2 per cent in September 2026.
The rise in borrowing costs led to fears that the Chancellor might have to raise taxes to restore a £23.6bn fiscal buffer. The government’s critics said such a move could further dampen growth prospects.
O’Neill’s advice on growth and tax
O’Neill was presented as a top adviser to Burnham during his Makerfield by-election campaign. City AM reported that he was in talks to take an official role before he later declined to join Burnham’s team.
Since his announcement, O’Neill has warned the government against raising capital gains taxes because of their possible impact on risk-taking.
He also said London should continue to grow at a high pace despite concerns about the divide between the capital and other major cities. O’Neill said London had to be given some kind of priority to boost national growth, describing that position as ironic given Burnham’s bid to improve regional growth across the North of England.
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Source: City AM
