Burnham has no scope to increase borrowing, think tank warns
The National Institute of Economic and Social Research warns that Prime Minister Andy Burnham has limited fiscal room to fund his new cost-of-living measures. The think tank suggests that the government may need to raise taxes or cut spending to avoid increasing borrowing.
Why it matters
This reflects the economic constraints facing the new administration and the difficult policy trade-offs required to balance campaign promises with fiscal reality.
Image source, TOBY MELVILLE / Getty Images Image caption, Prime Minister Andy Burnham has announced a rake of cost-of-living measures since taking office last week
Prime Minister Andy Burnham will have to raise taxes or cut spending to meet his pledges on defence and the cost of living, a major think tank has said.
Burnham has announced a series of new measures since assuming office last week, including cuts to electricity bills and bringing the bus fare cap in most parts of England back down to £2 .
But the National Institute of Economic and Social Research (Niesr) warned the public finances will continue to be squeezed by more persistent inflation as a result of the Iran war.
It questioned whether Burnham had "fully thought through" how his promises would be paid for, but said the prime minister will have to raise taxes or cut spending elsewhere.
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