🔻British think tank IFS warning about how Iran war could affect the government budget

🔻The Institute for Fiscal Studies (IFS) has warned that a sharp rise in prices following the war between the United States and Israel against Iran has created a major challenge for Jeremy Hunt, Britain’s finance minister, in preparing his first budget.

According to the think tank, inflation higher than forecast could reduce the real value of the budget set aside for public services and force the government to choose between cutting spending, raising taxes, or a combination of both.

The Institute for Fiscal Studies has asked the government to present credible budget plans and not to predict reductions in spending for the coming years that it does not intend to carry out in order to make the budget appear balanced. The UK Treasury has declined to comment on what it described as “rumors and speculation.”

However, in the run-up to the International Monetary Fund’s annual meeting, John (Jeremy) Healey said: “The consequences of conflicts in the Middle East and Europe have affected countries around the world and led to higher fuel prices and the costs of mortgage loans.”

He added: “But the UK and its allies can tackle these challenges by working together.”

The British finance minister said the upcoming budget, relying on fiscal discipline, would help strengthen economic resilience and would provide an opportunity to ease the pressure of living costs on households.

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