In its latest global outlook the IMF has warned that there is “limited fiscal space” and borrowing costs already “elevated.” Paging Mr Burnham…
The international forecaster warned “domestic uncertainty” could hit the UK economy along with the Iran war could hit growth just as it upgraded its forecast for this year. Reeves will be handing that document about…
It also pointed to “a set of economic realities” that mean spending must go down as tax cannot go much higher without fundamental reform:
“These pressures could raise public spending by about 6 percent of GDP by 2050. Beyond the planned tax ratio increase until 2030, staff analysis suggests that the long-term scope for further revenue increases is becoming limited unless more fundamental tax reforms are envisaged.
Thus, the scale of rising spending pressures and limited tax space imply that a growing share of the adjustment will likely need to come from expenditure restraint in the longer term.
Deeper expenditure reforms could, for example, entail replacing the triple lock with a policy of indexing the state pension to the cost of living, improving the targeting of social benefits, as well as focusing more on preventative care, and expanding charges in the health system while protecting the vulnerable.”
Even the current ‘unambitious’ administration has pumped tax and spend to breaking point. And now the PLP has decided it wants a new PM who is “more Labour” in their policy approach…
Paula Barker, Liverpool Wavertree MP backing Andy Burnham, told Times Radio there wouldn’t be trouble from the markets under Burnham:
“The markets will have to fall in line.”