In a major update, UK’s Chancellor John Healey has put the country on notice for a challenging fiscal policy, warning that mounting international pressures and soaring global bond yields will squeeze public finances.
Speaking ahead of his debut Autumn Budget scheduled for October 28, Healey indicated that ongoing instability in the Middle East and rising borrowing costs are threatening economic growth and pushing up inflation.
The chancellor emphasized the necessity of maintaining a robust fiscal buffer against uncertainty, while walking a fine line to avoid rattling bond markets or breaching manifesto commitments on core taxation.
The upcoming package represents a critical test for the government’s economic strategy, balancing the demands of regional growth investments and public service funding against the strict discipline required by the Treasury.
“I resigned on the fact that we were not making enough of a commitment to defence, and we will do that now,” said Hailey.
Fully funding the defence investment plan in the upcoming Budget is the first step, Healey says, followed by a spending review which will “set out a clear path to how Britain will meet that Nato 3.5% commitment” by 2035. “We will set a target date for that 3% along the way,” he added.
Hailey also stressed that is primarily focus lies upon recent job cuts.
He said the West Midlands mayor has announced a £500,000 support fund to help these “really well skilled workers” find new work and “new opportunities to build their careers”.
The chancellor also promises to boost growth by devolving more spending decisions.
