LONDON: UK Chancellor of the Exchequer, John Healey, must find £35bil (US$46bil) to meet the Labour government’s spending ambitions, the Institute for Fiscal Studies (IFS) warns ahead of the budget later this month.
The closely watched think tank said that while the Chancellor of the Exchequer should have more headroom against his fiscal rules than expected, the credibility of the government’s spending plans was still in the balance.
Inflation will squeeze public spending and leave departments underfunded unless the government intervenes, according to the group.
“If you want to put up spending and not squeeze public services, then you have to look at tax rises,” said IFS director Helen Miller.
It came as Healy reaffirmed his commitment to fiscal discipline, as he prepared to travel to Thailand for the 2026 annual meetings of the International Monetary Fund where he will call on allies to work together to limit the impact of global shocks such as the war in the Middle East. — Bloomberg
