Iceland's former finance minister, Lord Richard Walker, has warned UK Prime Minister Andy Burnham that difficult and potentially unpopular decisions will be necessary in the upcoming Budget. Walker, who previously served as Sir Keir Starmer's cost-of-living champion, left his position just days before Burnham took office. He emphasized that British businesses cannot be treated as a "piggy bank" for government spending and that tough choices are now essential due to the current economic challenges. Walker pointed out that over the past 50 years, chancellors from both the left and right had been able to avoid making dramatic decisions on taxes and spending because they could borrow money more freely. However, he said this option is no longer viable, as bond markets have made it clear that borrowing is now too risky. Walker stressed the need for the government to either reduce spending or at least slow the rate at which it increases. Since taking office, Burnham has made several promises, including capping bus fares at £2, cutting VAT on household electricity bills, and ending rough sleeping. However, concerns have been raised about how these pledges will be funded. Burnham acknowledged that the upcoming Budget will be "challenging" for his government, especially after recent data showed inflation has reached a five-month high. Chancellor John Healey is set to present the first Budget since Burnham took office, amid growing concerns about the economic impact of Donald Trump's actions in Iran and the funding of UK defense. Rising inflation adds to the difficulties, with recent figures showing another increase. Bank of England governor Andrew Bailey has warned that interest rates could rise in the coming months if the conflict in Iran continues. Burnham told broadcasters that the current economic climate will make next month's Budget "challenging," but he insisted his government will not take risks with people's living standards. He said the government will carefully consider all factors affecting the economy as it prepares for the upcoming Budget.