The International Monetary Fund (IMF) has warned Britain faces ‘difficult fiscal choices’ if it is to meet ever increasing spending pressures. The fund predicted a surge in public spending, driven largely by commitments to welfare, health, and pensions.
According to the IMF, these policies will push public spending as a share of GDP up by 8 per cent by 2050. The message is clear: unless revenue is increased – i.e even more tax rises – the UK will need to confront ‘tough policy decisions’ about the future role of the state and the scale of public services it can afford to deliver.
Crucially, the IMF noted that the government’s ability to meet this challenge through borrowing is severely limited. With public debt already towering and borrowing costs elevated, there is ‘limited space’ for the Treasury to manoeuvre without risking fiscal instability.
Despite the stark warnings, the IMF offered some optimism by slightly upgrading its growth forecast for the UK economy in 2025 from 1.1
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