{"text":[[{"start":9.35,"text":"The IMF has warned that Andy Burnham cannot afford to boost public spending given the “challenging” UK budgetary outlook, with any support for energy bills needing to be offset by savings elsewhere."}],[{"start":20.799999999999997,"text":"In a stark warning to the incoming prime minister, the fund said on Thursday that the UK government’s response to the energy shock unleashed by the Iran war should remain “tightly targeted, temporary and budget-neutral”."}],[{"start":34.5,"text":"The backdrop of global volatility and edgy bond markets meant that it would already be difficult for the government to deliver the fiscal tightening it had promised, the IMF noted in its annual health check on the UK economy. "}],[{"start":47,"text":"“This calls for a cautious approach to new fiscal pressures: the authorities should be very selective in accommodating new demands and reprioritise, while sticking to the deficit reduction plan,” the fund said."}],[{"start":58.2,"text":"It added: “Future spending reviews should focus on reallocating resources across departments, rather than increasing total spending.”"}],[{"start":65.9,"text":"The IMF’s warning, delivered in its latest Article IV report on the UK, follows repeated signals from Burnham that the cost of living support for households will be among his early priorities on entering Number 10."}],[{"start":77.80000000000001,"text":"Burnham has previously suggested there may be “some room” for movement on tax. On Wednesday — in an interview with the former footballer Gary Lineker — he said he might “at some point” have to “ask for a little more”. "}],[{"start":91.05000000000001,"text":"The IMF said the government should draw up contingency plans both for tax increases and for spending cuts, in case its fiscal plans were blown off course by a slowdown in growth. "}],[{"start":101.65,"text":"It already expects GDP growth to fall to 1 per cent in 2026, compared with 1.4 per cent in 2025, but underlined the risks of a sharper downturn if the disruption to global energy supplies persists. "}],[{"start":115.95,"text":"Tax measures to fill a hole in the fiscal plans in the short term could include ending exemptions from VAT, reforming property taxes and raising tax on capital gains, it noted, echoing earlier advice from the OECD. "}],[{"start":129.85,"text":"But the fund said that in the longer term the UK would need to curb spending growth rather than looking for new sources of revenue, when the tax take was already set to climb to a historic high."}],[{"start":141.7,"text":"Relying on tax measures alone to meet the pressures of population ageing, climate change and defence needs “would risk amplifying distortions and undermining growth”, it warned. "}],[{"start":152.29999999999998,"text":"The standard rate of VAT is already above the OECD average and property taxes are high by international standards, it said. The UK was also approaching a point where further increases in labour taxes could have a “sizeable” effect on employment and weigh on GDP, it said, adding that targeting tax increases on the top 10 per cent could end up reducing revenue by discouraging work. "}],[{"start":175.29999999999998,"text":"Spending restraint would not mean a “wholesale retrenchment of the welfare state”, the fund argued, but it urged ministers to replace the “triple lock” on the state pension with a less costly indexation to inflation, as well as reviewing eligibility for health-related benefits. "}],[{"start":192.1,"text":"The government argued in response to the IMF that the action it had taken to rebuild fiscal buffers over the past two years “should reduce the need for further material tax increases”. "}],[{"start":202.7,"text":"It acknowledged that the rising tax burden carried “implications for tax policy” but said there was still scope to improve efficiency and pursue tax reforms that would lessen the damage to growth. "}],[{"start":215.35,"text":"Chancellor Rachel Reeves said the IMF was “backing the choices I’ve made to put the country in a much stronger position than it was two years ago”, noting that the UK was the only G7 country that had received a growth upgrade from the international body this year."}],[{"start":238.64999999999998,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1784255514_2194.mp3"}