What Andy Burnham could mean for UK fiscal policy, Meta wades into prediction markets, and record bond issuance signals AI confidence

Welcome to this week’s Market Pulse, your 5-minute update on key market news and events, with takeaways and insights from the Sidekick Investment Team.

Today, we’re looking at what Andy Burnham’s premiership could mean for UK fiscal policy, Meta’s move into the booming prediction markets space, and what record corporate bond issuance tells us about investor confidence in AI.

But first, our number of the week…

29%

Those are the odds that Wes Streeting will serve as the UK’s next Chancellor under Andy Burnham, according to prediction market Polymarket. The current frontrunner, Streeting has discussed plans to shake up the UK’s tax regime.

Sidekick Takeaway: Notably, markets are giving Rachel Reeves less than a 1% chance of being re-appointed under Burnham. No matter who the next Chancellor is, Reeves’ absence indicates the potential for a sharp change in direction.

Only have a minute to read? Here’s the TL;DR:

• Having lost Labour’s confidence, Keir Starmer resigned as PM on 22 June. Andy Burnham is set to replace him, potentially by mid-July. Burnham’s advisers and allies have signalled a push for greater fiscal flexibility, with specific plans set to be laid out in a landmark speech next week.
• Meta is building a standalone prediction markets app called Arena, entering a space that has so far avoided sustained regulatory oversight. With three billion potential users, Meta’s entry could force regulators to define what prediction markets actually are – gambling, investing, or social platforms.
• US investment-grade bond issuance hit $120 billion in the first half of June, driven by tech companies funding AI infrastructure. Despite record issuance, credit spreads have barely moved, signalling strong investor confidence that AI cashflows can service the debt.

It’s important to note that the content of this Market Pulse is based on current public information which we consider to be reliable and accurate. It represents Sidekick’s view only and does not represent investment advice - investors should not take decisions to trade based on this information.

Burning Question: What Andy Burnham Could Mean for UK Fiscal Policy

After weeks of speculation, Keir Starmer resigned as Prime Minister on 22 June, having lost the confidence of his own party.

Andy Burnham, the former Mayor of Greater Manchester, has emerged as the unchallenged replacement. Burnham could be installed in Downing Street by mid-July.

So far, gilt markets have reacted relatively calmly. But investors and voters have been left without a specific economic roadmap.

Burnham is expected to lay out his fiscal plans next week. In the meantime, his advisory circle already offers a sense of direction.

Reading the tea leaves on fiscal policy

In contrast to Starmer’s focus on budget discipline, Burnham is expected to take a more flexible approach:

• Jim O’Neill, a former economist at Goldman Sachs and one of Burnham’s chief advisers, has publicly called for more expansive fiscal policy, including billions in new infrastructure spending.

• Richard Leese, a long-time Burnham ally, commented that he expects Burnham to seek ‘flexibility’ in how fiscal rules are applied, arguing that growth needs to be a priority.

• During the campaign, Burnham’s team said he would stick to the UK’s existing fiscal framework. However, those rules could be reinterpreted, even if they’re not rewritten.

While we lack specifics for now, Burnham’s direction of travel is clear: more flexibility, more focus on growth.

Sidekick Takeaway: Burnham’s focus on growth and flexibility is laudable. But as the UK’s seventh PM in ten years, he’ll have to convince investors and voters that spending can offer a way out of the UK’s fiscal hole, not a path deeper into it.

Crystal Brawl: Meta Building a Prediction Markets App

So far, prediction markets like Kalshi and Polymarket have operated in regulatory grey zones.

Sitting between gambling, social, and investing platforms, they’re in a gap without clean oversight.

That could be set to change. According to insider reports, Meta is building a prediction markets app to compete directly with incumbents.

Meta is already under regulatory scrutiny, and a prediction platform with three billion potential users could make the current situation untenable.

Too big to ignore

By wading into prediction markets, Meta could draw oversight to an industry that has largely avoided it:

• Meta’s app, internally called ‘Arena,’ would initially use a points-based system rather than real money. However, Meta hasn’t ruled out eventual cash wagering.

• Global prediction market volume hit over $20 billion this year, but regulation has struggled to keep pace. In Europe, several countries ban these platforms under gambling laws, while US oversight is fractured.

• Meta’s entry could force global regulators to define what prediction markets actually are. A platform embedded in a three-billion-user ecosystem is hard for policymakers to ignore.

More broadly, Arena highlights the growing socialisation of financial platforms and financialisation of social ones.

Existing regulatory regimes aren’t designed for platforms that blur these lines – which is exactly why prediction markets can be so challenging to police.

Sidekick Takeaway: Perhaps most striking is Meta’s plan to use AI to automatically generate markets and resolve outcomes in near real-time. That means one company’s algorithm could soon decide what millions of people bet on and whether they win.

Debt Signal: What Record Bond Issuance Tells Us About AI Confidence

The debate over AI valuations has dominated equity markets for months. But stocks aren’t the only source of information.

Credit markets are offering their own verdict on AI valuations – and right now, it’s decisively bullish.

US investment-grade bond issuance in the first half of June topped $120 billion, a three-standard-deviation spike above the historical average.

That increase was largely driven by technology debt. But despite record issuance, credit spreads barely moved, indicating that investors see a minimal risk of default.

Credit markets cast their vote

Bond investors appear confident that AI’s future cashflows will be able to comfortably service record levels of debt:

• Morgan Stanley estimates hyperscalers will collectively issue $400 billion in bonds this year to fund data centres, chips, and AI infrastructure.

• But despite the surge, credit spreads – the risk premium that investors demand over government bonds – have barely budged.

• BBB spreads are currently around 90 basis points, well below their historical average. In other words, bond investors don’t appear worried about potential defaults.

Equity analysts might be split on tech valuations. But for now, credit markets are saying AI cashflows are real and durable.

Sidekick Takeaway: Tight spreads do have a trade-off: investors have less cushion if the AI thesis disappoints. However, looking at credit markets offers a more useful gauge of AI confidence than equity markets alone.

Notices

Sidekick Money Ltd is a company registered in England and Wales (No. 13882980). Sidekick Money Ltd is authorised and regulated by the Financial Conduct Authority (FRN 984829). Our address is 6-7 St Cross Street, London, EC1N 8UB.

Please remember, investing should be viewed as longer term. Your capital is at risk - the value of investments can go up and down, and you may get back less than you put in.