The war in Iran has done less damage to the UK’s public finances than was first feared, Andy Burnham will reportedly be told in what will be a boost to the incoming prime minister - but he is still facing a major black hole in the public finances as a result of unfunded defence pledges.
Mr Burnham is expected to be briefed by the Treasury in within days about the economic situation facing the UK, with sources telling the Financial Times that the conflict in the Middle East - which sent oil and gas prices spiralling and triggered an increase in inflation - has only dealt a modest blow to the £23.6bn “headroom” built by the chancellor at the last budget.
