![\"Rachel](\"https:\/\/www.europesays.com\/britain\/wp-content\/uploads\/2026\/05\/Rachel-Reeves-is-set-to-oversee-low-growth-this-year-e1776161265960.jpg\")
\t\tReeves is tasked with keeping tax receipts intact despite the Iran war.\t<\/p>\n\t\t\tMonday 18 May 2026 12:00 pm
\n\t\t\t\t\t\u00a0|\u00a0\u00a0Updated:\u00a0<\/p>\n
\t\t\tMonday 18 May 2026 12:14 pm\n\t<\/p>\n
\t\tReeves is tasked with keeping tax receipts intact despite the Iran war.\t<\/p>\n
The UN\u2019s global financial fund has called on Chancellor Rachel Reeves to drop the triple lock pension and draw up \u201ccontingency\u201d tax measures to ensure that public debt is reduced as a share of GDP.\u00a0<\/p>\n
The International Monetary Fund has said that there are \u201crisks\u201d around spending forecasts and tax receipts, criticising the Chancellor for relying on \u201cambitious efficiency savings targets\u201d.\u00a0<\/p>\n
It added that the increases in receipts depend on \u201csizeable but uncertain yields\u201d from HMRC administrative efforts to narrow the tax gap.\u00a0<\/p>\n
Its latest report on the state of UK public finances and the wider economy the group said: \u201cIn case the consolidation is pushed off course, contingency measures on both sides should be formulated in advance.\u201d<\/p>\n
It said the government should consider simplifying the tax regime by broadening the VAT base and reforming property taxes, echoing similar demands from the OECD<\/a>.\u00a0<\/p>\n The fund\u2019s economists also said the welfare bill should have better controls in order to keep planned deficit reductions in place.\u00a0<\/p>\n One key reform recommended over the longer term would be to replace the triple lock pension \u201cwith a policy of indexing the state pension<\/a> to the cost of living\u201d.\u00a0<\/p>\n The triple lock means the state pension rises by whichever is highest out of wage growth, inflation or 2.5 per cent. Several leading economists, including Office for Budget Responsibility chiefs, have labelled the mechanism \u201cunsustainable\u201d for public finances as it has cost three times as much as originally predicted.<\/p>\n Pressures for higher defence spending, supporting an ageing population and net zero expenditure could add to constraints on public finances over the coming years.\u00a0<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tThe tax effect: Reeves borrowed less than OBR forecast<\/a><\/p>\n IMF analysis suggested these factors could raise public spending by about 6 per cent of GDP by 2050.\u00a0<\/p>\n Tax reform is \u2018fundamental\u2019<\/p>\n Further increases in taxes to support spending increases could be problematic given the tax burden was rising to a post-World War II high, making sweeping tax reforms and introducing further spending efficiencies \u201cfundamental\u201d for reducing the deficit.<\/p>\n The government spent around \u00a3110bn on servicing debt, with ongoing Labour leadership speculation fuelling concerns that the cost of interest payments to lenders could spike further and add constraints on public finances.\u00a0<\/p>\n The IMF slightly revised up its growth forecast for the year to one per cent while suggesting that inflation would peak at \u201cjust below four per cent\u201d later this year\u201d before easing in mid-2027.\u00a0<\/p>\n The last IMF report said growth this year would be 0.8 per cent as the UK suffered a bigger downgrade than any G7 nation.\u00a0<\/p>\n