By David Milliken
BANGKOK, Oct 12 (Reuters) – British finance minister John Healey will stress the importance of budget discipline and improving resilience to geopolitical shocks when he meets his foreign counterparts on his first trip to the International Monetary Fund’s annual meetings this week.
“I will work with our international partners to keep trade moving, support families and businesses, and make Britain’s economy stronger and more resilient,” Healey said in a statement released by his office.
Healey will argue that major economies need credible plans to get borrowing under control, the finance ministry said, following similar calls last week from IMF Managing Director Kristalina Georgieva and Bank of England Governor Andrew Bailey.
• The IMF and World Bank hold their annual meetings this week in Bangkok, where finance ministers and central bank chiefs will discuss the impact of the widening war in the Middle East and its effect on energy prices and inflation
• Healey will meet Ukrainian Finance Minister Sergii Marchenko among others to discuss resilience
• Last week major economies’ government borrowing costs hit their highest in decades, driven by investor worries about inflation caused by the US-Iran war, high levels of government borrowing and the need for higher interest rates
• Healey repeated that he would deliver “fiscal discipline” at his first annual budget on October 28, when he will need to take steps to keep plans to lower borrowing on track, in the face of higher debt interest costs and a desire to spend more on defence and reducing energy costs
• Britain’s Institute for Fiscal Studies estimates Healey will need £36 billion of tax rises – equivalent to raising the main rate of income tax by 3 percentage points – if he wants to fully offset the erosion of government budgets caused by higher inflation and fund extra defence spending
(Reporting by David Milliken, editing by Alexandra Hudson)
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