IMF and OECD warn Burnham Britain faces ballooning debt and slower growth ahead of Budget

From the Newshound archive · first published 23 September 2026 · last updated 24 September 2026.

Chancellor John Healey's Budget is under mounting pressure after both the OECD and IMF warned Britain faces sluggish growth and soaring borrowing costs, with Healey reportedly needing to find £15 billion just to maintain the financial buffer left by his predecessor. The OECD has cut its UK growth forecast for 2027 to just 1%, while UK inflation is now expected to stay above the Bank of England's 2% target well into next year. IMF chief Kristalina Georgieva told the BBC that debt levels have been rising "like a staircase not to heaven" and that politicians must show "courage" to act.

The warning strikes directly at Burnham's flagship promise of "growth in every postcode", delivered as he flew to New York to pitch Britain to investors.

The UK could face the worst of both worlds — stagnant growth and stubborn inflation — if the Iran conflict drives energy prices higher still, the Bank of England's governor has warned.

Burnham has already admitted "difficult decisions" lie ahead, but has previously spooked bond markets by suggesting Britain should be less "in hock" to investors.