Andy Burnham issued with bombshell warning by International Monetary Fund | Politics | News
New Prime Minister Andy Burnham has been issued a warning by a major international body amid fears over public spending. The Makerfield MP, who will officially replace Sir Keir Starmer on Monday, has been urged to take a “cautious approach” to the country’s finances to avoid economic “surge”.
The Washington-based International Monetary Fund (IMF) published the recommendation in a new report days before Mr Burnham began his term as premier. He was told to be “very selective about meeting new demands” and to “stick to the deficit reduction plan” spearheaded by Chancellor Rachel Reeves. Ms Reeves appears to have accepted that she will not remain in office under Mr Burnham, but it is unclear who will succeed her, creating uncertainty about the new government’s economic priorities.
The IMF report called on Mr Burnham to focus future spending reviews on “the reallocation of resources across departments rather than increasing total spending” and to maintain a “tightly targeted, ad hoc and budget-neutral” response to the energy shock of the Iran war.
This will mean avoiding universal support schemes introduced after the 2022 energy crisis, which cap annual energy bills for the typical household at £2,500.
“Broad-based measures such as cuts in energy taxes, energy price caps or generalized subsidies should be avoided because they are costly, difficult to resolve and weaken price signals,” the organization, which has about 190 member countries, said. he warned.
The IMF has previously praised Ms Reeves’ tenure as Chancellor for striking a good balance between reducing the UK’s budget deficit and “growth-friendly spending” and investment in sectors such as health and education.
Responding to the report, Ms Reeves said: “We have the right economic plan to build a stronger, more secure Britain; the IMF supports the choices I have made to put the country in a much stronger position than it was two years ago.”
