Reeves will have to raise taxes, charge for the NHS or ditch pensions triple lock, warns IMF
The beleaguered chancellor raised taxes by £40bn in her first Budget last year, partly to fund record new investment in the NHS.
But now the world's most important financial watchdog has warned that she will probably have to break an election promise to raise 'taxes on working people' – income tax, VAT or national insurance contributions by employees to balance the books.
In a report on the UK economy - Article IV Consultation with United Kingdom - the International Monetary Fund warned: 'Unless the authorities revisit their commitment not to increase taxes on 'working people', further spending prioritisation will be required to align better the scope of public services with available resources.'
It went on: 'The triple lock [guarantee on the state pension] could be replaced with a policy of indexing the state pension to the cost of living.
'Access to public services could also depend more on an individual's capacity to pay, with charges levied on higher-income users, such as co-payments for health services, while shielding the vulnerable.
'There may also be scope to expand means testing of benefits.'
The challenges Ms Reeves is facing, the IMF said, included the impact of Donald Trump's continuing tariffs war with the rest of the world as well as 'little fiscal headroom' in the UK finances.
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