John Healey will argue the government’s plans to boost growth across the whole country will enable the British economy to “turn a corner” despite anxiety over volatile bond markets derailing Labour’s crucial first budget.

The chancellor is expected to argue that fiscal discipline is “indivisible” from good growth, especially at a time of difficult global headwinds, amid concerns that his cautious approach jars with Andy Burnham’s more radical policy plans.

In a speech in the West Midlands on Monday, Healey will set out how the government plans to boost regional economies by easing Treasury bureaucracy and giving more powers to local leaders to drive business investment, innovation and skills.

But public finances are under pressure from soaring global bond yields, which hit an 18-year high last week, driving up government borrowing costs, resulting in Healey putting Britain on notice for a tough 28 October budget.

Economists have predicted that the chancellor – who has said he wants a “buffer against uncertainty” – will have to put up taxes or cut spending to protect the £24bn fiscal headroom his predecessor Rachel Reeves had last year.

“Fiscal credibility is indivisible from good growth,” the chancellor is expected to say. A Treasury source said this was “true at any time, but especially at a time of global uncertainty” amid warnings that Donald Trump’s war in the Middle East would push up inflation and hit public finances.

Healey will say that, despite the bleak global backdrop, pursuing growth across every region will help unlock “huge latent potential” and show Britain is “turning a corner”, with people, businesses and communities ready to seize the opportunities of new technologies.

The prime minister argued at the weekend that it would be impossible to build a dynamic economy on crumbling infrastructure, with businesses needing affordable energy and reliable transport, and so more investment would be needed.

But in a move that will undermine Labour’s efforts to reindustrialise, the UK’s biggest carmaker, Jaguar Land Rover, which is based in the West Midlands, was expected to announce thousands of job cuts.

During a speech at a manufacturing site on Monday, Healey is expected to reiterate that Britain’s growth must extend beyond its biggest cities.

“The prime minister laid out a clear diagnosis of what has gone wrong in the past,” he is expected to say. “The solution is a fundamental shift that starts with putting power in the right places. The next chapter of Britain’s growth story will be written in more places.”

National government must work with the new No 10 North on a “dual mission” to remove obstacles for local leaders and businesses, he is expected to say. “Instead of getting in the way with complexity and red tape, we need a strong, strategic centre wired to enable local leaders and their ambitions.

“I want to see wealth creation in this country. I want to see businesses make a profit. And to create the conditions for that we need an active, accountable state at all levels to remove blockages and create the conditions for more investment.”

Healey will announce that the British Business Bank will allocate £150m to scale up businesses across the north of England. The pot will offer investments from £5m to £15m to help university spinouts and the expansion of other innovative companies.

He will underline the government’s commitment to “place-based” growth, building on Reeves’s attempts to move the focus of the Treasury away from the south-east. “Ask an economist what growth is and you’ll get a number,” he will say. “But ask the country and you’ll get a different answer.

“A young person getting a new job in a company that’s on the up. A sole trader winning a new contract that pays for a holiday with their kids. A business winning a new export order, giving the community around it a new lease of life.”

However, businesses are braced for what they fear will be higher taxes to fill a fiscal hole caused by rising borrowing costs and Burnham’s new spending plans. In an interview with the Financial Times on Saturday, Healey refused to rule out increasing levies on bank profits.

Healey has also been under pressure over the timeline to hit defence spending targets, after quitting Keir Starmer’s cabinet over the issue. On Sunday, the business secretary, Jonathan Reynolds, indicated the government would spend 3% of gross domestic product on defence by 2030.

“We’ve made some clear movements early on to show that direction of travel … [Healey] has not moved away from the target you’ve said. He said the fundamental target is the 2035 3.5% of GDP on defence spending that is our Nato commitment. The trajectory to that covers the 3% but that is the principal target,” said Reynolds.

Robert Jenrick, Reform UK’s economic spokesperson, said: “Even Rachel Reeves had more vision than this guff. Days after a market meltdown, when grip and direction are required, John Healey has revealed himself to be an empty vessel with no idea about how to rescue our economy.”

Andrew Griffith, the new shadow chancellor, described Healey’s speech as a “policy-light word salad”, saying it would do little to comfort families and businesses who were worried about more tax rises or the rates of government borrowing.

On the BBC on Sunday, Griffith, who was a Treasury minister at the time of Liz Truss’s disastrous mini-budget, said there had been “lots of good things” in that fiscal statement – including tax cuts and cutting regulation – attracting criticism from Labour.