UK Prime Minister Starmer says first budget will not undermine growth target Reuters

ROME (Reuters) – British Prime Minister Keir Starmer said his government’s first budget next month would not take steps to undermine his goal of generating growth, but warned that unfunded spending commitments could harm the economy.

Elected in July, Starmer said she had a terrible legacy left by the previous Conservative administration, and new Chancellor of the Exchequer Rachel Reeves warned taxes were likely to rise in her first budget on October 30 because of what she said that it is 22 billion. pound ($29 billion) black hole in public finances.

Ahead of this budget, Starmer said that while solving this black hole was essential to creating the stability needed for growth, all decisions would be made against the growth objective.

“If it promotes economic growth, it is in the Yes column; if it inhibits economic growth, then it’s in the No column,” Starmer told reporters on a trip to Italy on Monday.

“And because I think stability is vital to economic growth — I don’t think we’re going to get economic growth unless we stabilize the economy — we’re going to make things really tough now.”

Labor has committed to a fiscal rule that day-to-day costs are covered by revenue and debt must fall as a share of the economy within five years, according to budget forecasts.

Asked whether he would change the tax rules to promote growth amid concerns from some economists about underinvestment in the economy, Starmer said it was a matter of the budget, but strong tax rules were important.

“I’ve always believed it’s important to borrow to invest,” Starmer said, although she warned she did not want a repeat of the unfunded budget measures that sparked a crisis that forced Conservative Prime Minister Liz Truss to resign in 2022.

“Unfunded spending commitments are just as bad (as unfunded tax cuts) and likely to have the same impact on the economy.”

($1 = £0.7573)