New UK Chancellor John Healey has warned that the economic fallout from the US-Israel war on Iran could make the upcoming budget more difficult, with the conflict already putting pressure on inflation, growth and borrowing costs, the Financial Times reported.
“What’s happening in the Middle East is hitting inflation, it’s hitting growth, it’s hitting borrowing costs,” Healey told the newspaper.
“It’s part of a more dangerous world that is more uncertain, and it’s one of the challenges we have to meet in this country,” he added.
The warning comes as British economists call for further tax increases to give the government more room to respond to economic uncertainty. The calls follow sweeping tax hikes introduced last year by Healey’s predecessor, Rachel Reeves.
Healey said he and Prime Minister Andy Burnham would work to build “a buffer” against economic uncertainty, as the government prepares for a challenging budget amid mounting global risks.