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Burnham has no scope to increase borrowing, think tank warns
NIESR said inflation will stay higher for longer and warned the government has no room for extra borrowing to fund new pledges.
- On Wednesday, the National Institute for Economic and Social Research cautioned Prime Minister Andy Burnham and Chancellor John Healey that there is "no capacity to borrow any more" to fund new policy commitments.
- Burnham's recent announcement of £2bn in giveaways—including a £2 bus fare cap, VAT cuts on energy bills, and reduced business rates for pubs—prompted NIESR analysts to question how these commitments would be funded.
- NIESR projects inflation will rise to 3.8% next year, potentially forcing the Bank of England to hike interest rates again to return to the government's 2% target, complicating fiscal planning.
- Deputy director Stephen Millard advised funding measures through tax reform or spending cuts, noting "there's clearly no scope for increasing borrowing" despite Burnham's pledge to protect working people from tax increases.
- The Treasury said it will stick to fiscal rules while investing in public services, though NIESR warns of a 4% real spending squeeze by decade's end equating to approximately £24bn in 2023 prices.
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Andy Burnham faces ultimatum: raise taxes or cut spending as 'no scope' for extra borrowing
Andy Burnham has been told he must either raise taxes or cut spending in a concerning ultimatum, as there is "no scope" for extra borrowing.The National Institute of Economic and Social Research (Niesr) has called on the new Prime Minister to outline how he plans to pay for his recently announced cost-of-living and defence commitments, cautioning that further Government borrowing is simply not an option.The respected economic think tank warned t…
·London, United Kingdom
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The IndependentReposted by 
Western Morning News
Western Morning NewsBurnham warned he will have to raise taxes or cut spending to fund his pledges
Leading economic think tank warns there is ‘no capacity’ to borrow more with inflation set to go higher than expected, growth set to plummet and a massive squeeze on spending
·London, United Kingdom
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Coverage Details
Total News Sources10
Leaning Left1Leaning Right3Center3Last UpdatedBias Distribution43% Center, 43% Right
Bias Distribution
- 43% of the sources are Center, 43% of the sources lean Right
43% Right
14%
C 43%
R 43%
Factuality
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