The International Monetary Fund (IMF) has urged the British government to confront 'economic realities' and slash borrowing or risk a market revolt as the UK nears peak tax. The watchdog declared there was 'limited' scope for further tax rises following £75billion of hikes by Rachel Reeves since she became Chancellor less than two years ago. With the tax burden at its highest level since the war, the IMF warned 'difficult choices to contain spending' would be required.
Labour has been urged to get a grip on the soaring welfare bill and slash borrowing or risk a market revolt as Britain nears peak tax.
The International Monetary Fund (IMF) declared there was 'limited' scope for further tax rises following £75billion of hikes by Rachel Reeves since she became Chancellor less than two years ago. With the tax burden at its highest level since the war, the watchdog warned 'difficult choices to contain spending' would be required.
The report came as government borrowing costs scaled fresh multi-decade highs with the yield on 30-year gilts hitting 5.86 per cent for the first time since 1998 before easing. Investors fear a lurch to the Left in Andy Burnham replaces Sir Keir Starmer. The IMF said staying the course on deficit reduction will be important given market pressures and elevated implementation risks. The Washington-based Fund cautioned against expensive bailouts for households struggling with their energy bills due to the war.
The economy is expected to grow by 1 per cent this year following expansion of 1.4 per cent in 2025. Inflation is expected to peak just below 4 per cent at the end of this year as energy bills soar. The main risk is a prolonged war in the Middle East, resulting in higher energy and food prices for an extended period, and sustained global market volatility, which would weigh on confidence and hurt economic activity
International Monetary Fund UK Economy Welfare Bill Borrowing Costs Rachel Reeves Tax Burden Difficult Choices Spending Energy Crisis War In The Middle East Global Market Volatility Inflation Growth Borrowing Costs Welfare Bill Rachel Reeves Tax Burden Difficult Choices Spending Energy Crisis War In The Middle East Global Market Volatility Inflation Growth
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