Rachel Reeves has been urged to increase taxes and cut public spending after the UK’s growth forecast was downgraded amid rising prices and the impact of Donald Trump’s trade war.
The Organisation for Economic Co-operation and Development (OECD) has warned the chancellor to “step up” efforts to bolster her fiscal headroom.
And it calls on her to begin to act within days – including in next week’s Spending Review, which will outline government spending for the coming years.
A new report by the economic organisation warns the government: “Strengthening the public finances remains a priority, by delivering on the government’s ambitious fiscal plans, including through the upcoming spending review.”
It says that a “balanced approach” should combine “targeted spending cuts, including closing tax loopholes; revenue-raising measures such as re-evaluating council tax bands based on updated property values; and the removal of distortions in the tax system”.
It also calls for the “swift” implementation of “pro-work reforms to the welfare state is key, while protecting the most vulnerable”.
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