Iran war threatens Healey's Budget plans, think tank warns
The think-tank said higher inflation and borrowing costs could force £35 billion in tax rises or spending cuts to protect public services.
- Chancellor John Healey faces a £36 billion funding gap, the Institute for Fiscal Studies warned on Tuesday, driven by rearmament plans and higher inflation from the Iran war necessitating significant tax increases or benefit cuts.
- Higher inflation linked to the Iran war has increased government borrowing costs by around £10 billion, shrinking fiscal headroom to approximately £20 billion from a previous £24 billion forecast in March.
- Increasing defense spending to 3% of GDP by 2030 requires an additional £11 billion; IFS Director Helen Miller warned that avoiding service cuts forces a choice to "tolerate chunky cuts" to public services.
- Prime Minister Andy Burnham rejected calls to fund services by slashing welfare, telling the Rest Is Politics podcast it is "a mistake to put those two as one," while the Treasury declined to comment on speculation.
- Miller stressed the Chancellor must set spending envelopes he is "genuinely prepared to live within"; pencilling in unrealistic future cuts would "make the Budget a work of fiction," undermining credibility with investors.
19 Articles
19 Articles
John Healey faces £35billion Budget black hole, IFS warns
John Healey faces £35billion Budget black hole, IFS warns . Chancellor John Healey faces a £35billion shortfall in the public finances ahead of his first Budget, according to the Institute for Fiscal Studies
A warning over the upcoming Budget and coverage of the Russia-Ukraine war lead Monday's papers. Source link:
UK’s Healey can’t risk a ‘steady as you go’ budget, think tank warns
By William Schomberg LONDON, Oct 12 (Reuters) - British finance minister John Healey will need to find £36 billion ($47.6 billion) in tax hikes or welfare cuts in his first budget just to offset the inflation hit to public services and meet a defence s...
The Independent
The Independent (US)Burnham warned ‘steady as she goes Budget’ would see ‘chunky cuts’ to public services
Leading think tank IFS the Institute for Fiscal Studies warned chancellor John Healey against making the Budget ‘a work of fiction’
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