Jonny Fry, founder and chief executive of Team Blockchain, has set out his views on UK fiscal rules and bond markets in a new episode of the UK Investor Magazine podcast, alongside a broader assessment of how artificial intelligence, blockchain and tokenisation are reshaping capital markets.
Fry brings more than 25 years’ experience as a blockchain, crypto and digital assets specialist to the conversation, according to his AI Expo speaker profile. He won the Influencer of the Year award at the CryptoAM 2022 Awards and has authored the ‘Digital Bytes’ weekly newsletter on blockchain and digital assets since March 2018.
Burnham, Gilt Markets and the Fiscal Squeeze
A central theme of the podcast is the tension between Labour’s fiscal framework and bond market expectations. The UK gilt market, through which Britain finances public borrowing, is valued at approximately £2.9 trillion, according to The Guardian.
Andy Burnham is the focal point for that tension. After winning a by-election in Makerfield, Burnham moved closer to a potential challenge against Prime Minister Keir Starmer, and his comment that the UK had to move beyond being ‘in hock’ to the bond markets drove up benchmark gilt yields, Bloomberg reported.
Burnham’s campaign subsequently confirmed he has committed to the government’s existing fiscal rules, including limits on borrowing to fund day-to-day spending and a requirement that debt as a share of national income falls by the end of the Parliament, expected in 2029, BBC News reported. That walked back earlier suggestions the rules could be amended, for example by exempting defence spending rises as Germany has done.
The fiscal headroom underpinning those commitments is thin. The OBR’s October 2024 forecast estimated the current budget would enter surplus by 2027/28, but projected a current budget surplus of just £9.9bn in 2029/30, according to the Institute for Government, leaving the government on track to meet its stability rule by only a narrow margin.
Bond fund managers are already pricing in that fragility. Morningstar reports that managers are increasingly sceptical chancellor Rachel Reeves will stay within the rules, and that the IMF has suggested reducing OBR assessments from two to one per year, potentially giving the chancellor cover for more material fiscal adjustments.
UK Fiscal Rules and Bond Markets in a Wider Digital Context
Fry’s position on these pressures sits within a broader argument about the future of financial infrastructure. On the podcast, he sets out four developments he believes carry profound implications for finance, payments and digital assets, though the conversation does not detail all four in the published summary.
He examines the convergence of AI and blockchain with traditional banking, pointing to tokenised treasuries, instant settlement and round-the-clock capital markets as areas moving from concept to live deployment. His view is that global central banks have not yet fully grasped their regulatory role as these technologies mature.
Fry is also co-founder of the British Blockchain and Frontier Technologies Association, giving him a direct policy-facing role alongside his commercial work at Team Blockchain.
The podcast also addresses reports of income tax rises and examines what the bond market’s response to Labour’s fiscal choices means for UK investors in practice.
With gilt yields sensitive to any signal of fiscal slippage and the OBR’s next scheduled assessment on the horizon, Fry’s read on whether central banks and governments can manage that pressure alongside a fast-moving digital asset landscape sets up the debate Burnham’s leadership challenge has brought back to the surface.
