23 September 2026: Burnham refuses to rule out EU rejoin pledge in next Labour manifesto

In a major political shift, the Prime Minister has declined to rule out including a pledge to rejoin the European Union in a future Labour election manifesto. Speaking to reporters while travelling to the United Nations General Assembly in New York, Andy Burnham addressed questions about the long-term trajectory of Britain’s relationship with the bloc.

While he previously said he wanted the UK to return to the EU in his lifetime, he said his immediate focus is on securing practical economic agreements at an upcoming UK-EU summit and continuing to "rebuild bridges" broken earlier in the decade.

Burnham emphasised that questions about full EU membership are "for another day," prioritising the upcoming UK-EU summit and addressing friction over EU legislative manufacturing proposals.

The Prime Minister is facing mounting calls from several senior Labour figures and metropolitan mayors, such as Sadiq Khan and Wes Streeting, urging the party to consider rejoining the customs union or single market to stimulate economic growth.

Pro-EU groups and recent polling indicate growing electoral appetite for closer alignment, pressuring the leadership to look past current red lines, though doing so risks reigniting deeply polarised domestic debates over Brexit.

Burnham has opened the door to fighting the next election on a platform that includes the UK rejoining the EU, but said his immediate priority is to continue rebuilding bridges with European allies.

The Prime Minister, who will hold his first meeting with the European Commission President, Ursula von der Leyen, next week, did not rule out including a reversal of Brexit in Labour’s next manifesto, but suggested the country should focus on securing closer trading ties first.

“My immediate priority is to build on the good work that Keir did in rebuilding bridges. Because those bridges were broken in the early part of this decade. And Keir did a good job in re-establishing that relationship.”

Another round of tax rises now looks inevitable after Government borrowing hit its second-highest level on record in August. The figures exceeded economic forecasts and have piled more pressure on Chancellor John Healey ahead of his first Autumn Budget next month.

Public sector net borrowing jumped to £18.3 billion in August, £3.5 billion more than official Government forecasters had expected, the Office for National Statistics said. The figure was £2.9 billion, or 19%, higher than the same month last year and marked the second-highest August borrowing on record, behind 2020. Public sector net borrowing is the difference between what the Government spends in the public sector and what it raises from taxes and other income.

Much of the jump in borrowing seems to stem from the rising cost of existing debt. If several G7 economies were a person or corporation, they would be declared insolvent or liquidated. Borrowing more money to pay existing debts is no way to run an economy. But this is the economic reality: countries have debts that will never be repaid and will keep growing to record levels.

Sterling traded lower against a resilient USD yesterday, pressured by domestic fiscal concerns and sustained dollar strength driven by diverging monetary policies and rising UK Government borrowing. Sterling slipped by roughly 0.17% to close near $1.3344 by late New York trading, extending its recent decline to record losses in six of the past seven sessions.

Federal Reserve Bank of Richmond President Tom Barkin said there will eventually be a “reckoning” if US debt continues to rise, but it’s difficult to know when that might happen.

When asked about total US public debt surpassing $40 trillion, Barkin said the government can keep borrowing as long as the public keeps buying the debt. However, he added, there’s a risk investors could start to push back.

“There will be a reckoning on this as it goes forward. No one can tell you when,” Barkin said yesterday during an event in Charlotte, North Carolina. “We’re a global currency, rule of law, all the reasons people keep buying the debt. But, you know, at some point, people stop buying your debt, and that’s the risk out there.”

Barkin repeated remarks he made earlier this month, arguing for holding interest rates steady in light of evidence that inflation is declining, while also acknowledging that officials may have to raise interest rates if price pressures become embedded.

Barkin also discussed the wider economy and growth prospects. He told reporters that he is not hearing CEOs talk about a recession in the US. He recently noted that the U.S. economy is firming rather than heading towards a downturn, emphasising that he is not hearing business leaders talk about a recession.

Later, New York Federal Reserve President John Williams has publicly defended the Federal Reserve’s current monetary policy implementation system, emphasising its effectiveness in managing financial markets. As the US central bank, the Federal Reserve sets monetary policy to achieve maximum employment and price stability by managing short-term interest rates. Williams said providing “ample” reserves to the financial system, coupled with existing rate-control tools, has proven “highly effective” in delivering interest rate stability and supporting the smooth operation of core financial markets.

Speaking at a New York Fed conference on the Treasury market last evening, Williams affirmed that while the Central Bank’s rate-control framework has functioned well, it is not immutable and can be adapted to evolving market conditions. He emphasised the need for policy tools to remain “fit for purpose” as markets change, stating, “the evolution of financial market structure leads to the evolution of how we carry out monetary policy effectively.”

Notably, Williams did not comment on the immediate outlook for monetary policy or interest rates during his address.

In an address at the United Nations General Assembly at which he held talks with Prime Minister Andy Burnham and Ukraine’s President Volodmyr Zelenskyy among others, President Trump defended his war on Iran and boasted of American strength, claiming that “while others have talked, I have acted.”

He celebrated the U.S. military operation to oust Venezuelan President Nicolás Maduro earlier this year and a new agreement to expand the American military presence in Greenland, which followed his threats of annexation.

But those actions have upended U.S. relationships with other nations, including traditional allies. Many of those allies have used the United Nations forum to call for a return to international law.

This 81st Session of the United Nations General Assembly is taking place as the world grapples with oil supply shocks and rising prices driven by the closure of the Strait of Hormuz, and under the shadow of Trump’s constant attacks on multilateralism.

Canada, like most countries, has not been able to escape the geopolitical effects of Trump’s erratic deployment of military force and tariffs.

Prime Minister Mark Carney said one shared challenge of the moment is a multilateral system that doesn’t reflect the times and cannot respond to them.

“But at the same time, the need for multilateral co-operation is very much alive,” Carney told reporters.

The U.S. dollar traded on a firmer footing across major foreign exchange markets yesterday, supported by persistent yield advantages and hawkish messaging from Federal Reserve officials.

Germany's leading economic institutes are revising their growth outlook upwards after earlier projections of slower expansion. The revised estimates point to faster growth in both 2026 and 2027, as the economy remains a central political issue following recent regional elections.

Five of Germany's leading economic institutes now forecast that Europe's largest economy will grow by 1.3% in 2026, more than doubling an earlier estimate of 0.6%.

For 2027, these institutes now expect growth of 1.1%, compared with a previous forecast of 0.9%, according to several sources.

The forecasts are produced jointly by WI in Essen, the Ifo Institute in Munich, IfW in Kiel, IWH in Halle and DIW in Berlin.

Germany's weak economic performance remains a major issue in the country's political debate. The sluggish economy has featured prominently in recent regional elections, which have brought strong gains for parties on the far right and far left.

The upgraded projections suggest a more constructive near-term outlook for German industry and the wider European economy, even as the country's recent period of weak growth continues to weigh on policy discussions.

Early signs of recovery have emerged after Berlin opened more room for defence and infrastructure spending. The rebound was uneven; exports and earnings expectations improved, while consumer sentiment and political risks continued to weigh on broader confidence.

The ‘green shoots’ may be about to flourish into something more tangible, helping reassert Germany’s position in Europe and the world.

However, China’s rapid expansion into higher-value industrial and technology sectors is increasing competitive pressure on European manufacturers, with Germany among the countries most exposed, the European Central Bank has said.

The ECB said China’s growing presence in international markets is challenging European exporters, particularly in machinery and transport equipment, where German companies have traditionally held strong positions.

According to an article in the ECB’s Economic Bulletin, the European Union’s share of global goods exports has declined in sectors and markets where Chinese manufacturers have significantly expanded their presence. The Central Bank has questioned whether this is a challenge or a threat.

Among the EU’s major economies, Germany has the highest degree of export overlap with China, while Italy has the lowest, the ECB analysis found. Smaller economies such as Ireland and Greece have relatively limited exposure to Chinese competition.

Bundesbank President Joachim Nagel said energy has become more relevant to ECB policy over the past four years, while core inflation remains too high. He cannot rule out a move into mildly restrictive territory, but second-round effects are not yet significant.

Meanwhile, Philip Lane, Chief Economist at the ECB, projected that inflation in Europe will not stabilise until mid-next year due to a resurgence in energy prices.

He said the second wave of energy price rises will put upward pressure on groceries, broad energy like electricity, and general goods, adding that "if a stronger and more persistent shock occurs this Autumn, it will weigh on the economy." He also estimates that the Eurozone's inflation rate would fall to the 2% target around mid-next year, adding, "Our baseline scenario is that the economy will continue to grow at a steady, moderate pace, provided the energy shock does not become severe."

The Euro traded on a subdued, defensive footing across global foreign exchange markets yesterday, weighed down by broad dollar strength and softer regional bond yields.

The single currency came under sustained downward pressure as the dollar held a firm bid. Although the pair made tentative attempts to stabilise, notably supported by a modest easing in US rates during North American afternoon trading, analysts noted a general market reluctance to view the bounce as the start of a broader reversal.

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