The Papers: 'Spending warning to Burnham' and 'Only 693 days till Euros'
The IMF gives a "spending warning to Burnham" and England eyes the Euros after its World Cup loss - Friday's front pages.
By BBC News
The International Monetary Fund has issued a spending warning to incoming UK Prime Minister Andy Burnham, urging him to avoid public spending hikes and stick to the deficit reduction plan set by his predecessors. The Washington-based fund told Burnham and his new chancellor to be "very selective" in accommodating new fiscal demands while reprioritising resources across departments .
The IMF stated that future spending reviews should focus on reallocating resources rather than increasing total spending . The report concludes that the authorities must adopt a cautious approach to new fiscal pressures to rebuild fiscal buffers for future economic shocks .
The fund noted that the 2022 fiscal crisis triggered by Liz Truss’s budget has left permanent scars, making the UK government bond market more sensitive to fiscal policy . Burnham has also received a caution against raising taxes as the economy remains stagnant, with Shadow Chancellor Sir Mel Stride advising that elevated taxes have stifled economic progress .
The IMF recommended the government prioritise reducing the deficit amidst rising energy costs . Treasury civil servants are set to hand Burnham bleak economic forecasts, warning that inflation could rise to 3.2pc in the final three months of 2026 .
Officials also flagged a possible oil shock from the Iran war that could push prices to $150 per barrel and trigger a fresh shock to the British economy . Meanwhile, England is looking ahead to the Euros with 693 days remaining after its World Cup loss, as highlighted in Friday’s front pages [summary].