IMF warns Reeves could have to hike taxes again to balance the books

Rachel Reeves could have to increase taxes again to balance the books despite a marginally improved economic outlook, the IMF warned today.

The Chancellor has welcomed the international body's latest assessment nudging up the growth forecast for UK plc from 1.1 per cent to 1.2 per cent this year.

However, it cautioned that there are still serious risks to Britain's prospects and government must 'stay the course' of stabilising the finances.

The report was released amid bitter squabbling over departmental spending settlements due to be announced next month.

Problems have been fuelled after a Labour revolt forced Keir Starmer to commit to partly reversing the scrapping of the winter fuel allowance.

IMF warns Reeves could have to hike taxes again to balance the books

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