An informal economic adviser to UK Prime Minister Andy Burnham has issued a cautionary warning about the government’s fiscal position ahead of the upcoming budget. Andy Haldane, president of the British Chambers of Commerce and former Bank of England chief economist, described the country as “skating on pretty thin ice” financially and advised against further tax increases.

Speaking in an interview on the sidelines of a Goldman Sachs event, Haldane emphasized that maintaining market confidence is crucial to avoiding an economic crisis. He said the government must demonstrate a willingness to reduce public spending in order to reassure financial markets, warning that failure to do so would leave the government vulnerable to pressure from the bond market. UK borrowing costs have risen sharply in recent weeks amid global bond market volatility, reducing the government’s fiscal flexibility.

Haldane expressed concern that businesses and financial market participants feel overtaxed and that current government spending levels and borrowing are unsustainable. Alongside Lord O’Neill of Gatley, a former Goldman Sachs chief economist, Haldane has been vocal in critiquing government policy despite not holding formal advisory roles. Last month, Haldane characterized the government as a “traditional tax-and-spend socialist government with better TikTok videos,” reflecting sentiments he said he had heard from both markets and the private sector.

Burnham’s first address as prime minister at the Labour Party conference last week included commitments to scrap the pensions “triple lock” to help fund social care, repeal restrictions on public ownership of utilities, and explore potential reentry to the European Union. The speech boosted Labour’s poll standings but drew criticism from Haldane for offering “precious little” detail on measures to support business growth. He suggested that the government’s economic approach appeared to lack a focus on the private sector, which he identified as the main engine of economic expansion.

While Haldane welcomed Burnham’s move to end the costly triple lock pension increase as a positive step toward fiscal consolidation, he noted that the government had already committed to other spending plans that undermined that fiscal headway. He also explained his choice to remain outside formal government roles, asserting that distance allows him to provide more candid advice.

O’Neill previously expressed concern that Burnham’s pledge to deliver “good growth to every postcode” could risk inefficient use of public funds. However, Haldane acknowledged that the current government team remains open to persuasion regarding economic strategy.

With the budget scheduled for later this month, ministers have suggested that businesses may receive a reprieve following Labour’s recent tax hikes, including increased employer national insurance contributions. Haldane cautioned that further tax increases on business and wealth could further undermine fragile confidence, impede growth, and deter investment and entrepreneurship. He stressed the importance of ensuring that investors see a fair balance of risks and rewards, warning that excessive taxation could drive away capital and talent critical to the UK economy.