The chancellor has indicated that the UK will face a tough budget next month due to Trump’s war in the Middle East.
In an interview with the Financial Times, John Healey said the conflict in Iran would probably have a strong influence on his first budget on 28 October.
Healey, who succeeded Rachel Reeves when Andy Burnham became prime minister in July, told the newspaper he wanted to ensure the country had a robust “buffer against uncertainty” amid increasing global instability.
However, economists have predicted that Healey will need to raise taxes or implement significant cost-cutting measures to protect the £24bn fiscal headroom that Reeves had after her March statement.
“What’s happening in the Middle East is hitting inflation, it’s hitting growth, it’s hitting borrowing costs,” Healey said. “It’s part of a more dangerous world that is more uncertain and it’s…
