Wednesday 15 April 2026 17:08
| Updated:
Wednesday 15 April 2026 17:09
Chancellor Rachel Reeves said that winding down wars in the Middle East was the “best economic policy” to protect growth as the International Monetary Fund (IMF) indicated that Britain’s tax burden would deepen at a faster rate than any other country.
Speaking at a CNBC event in Washington, Reeves doubled down on his attack on the Trump administration’s decision to start a war in Iran, calling it a “mistake.”
His comments came after the publication of an IMF fiscal report on government revenues and spending over the next few years, which showed the gap in government revenues to GDP will increase faster than in any other country tracked by the organization.
Reeves said: “We are a gas importer, which means we are impacted by the conflict in the Middle East, which is why I am sending this message loud and clear, along with the 10 other countries that have signed this statement today, that we want to see a de-escalation of the crisis.
The best economic policy now for the UK and globally is the de-escalation of the Middle East conflict and the reopening of the Strait of Hormuz, the Chancellor said.
Speaking in Washington, Rachel Reeves said: “We are a gas importer, which means that we are impacted by the conflict in the Middle East, which is why I am sending this message loud and clear, along with the 10 other countries that have signed this statement today, that we want to see a de-escalation of the crisis.
“Because our growth will be higher and inflation will be lower if this conflict ends, and that can only happen through de-escalation.
“But the best economic policy right now, not just for the UK but globally, is to defuse this conflict and reopen the Strait of Hormuz.”
‘We will beat estimates again’
Earlier on Wednesday, President Trump announced the “permanent” reopening of the strait, through which one-fifth of global oil and gas supplies, but decision makers were still weighing whether it was safe to send ships through the region.
Reeves has made no secret of his criticism of Trump’s war with Iran, claiming it was “stupidity” in an interview with the Daily Mirror.
It has been a difficult week for the Chancellor on his trip to the US after the IMF said the UK economy would suffer more damage than any other G7 country from the war. In the US, military experts including former Labor Defense Minister Lord George Robertson also criticized its failure to provide sufficient funding for the armed forces.
At an event in Washington, the Chancellor added that he was “confident” that the UK economy would “beat expectations” but insisted that diplomacy remained the best course of action to protect growth and price stability.
Taxes in the UK are increasing faster than in France
But in its latest report on Wednesday, the IMF said that the tax burden, measured by government revenue as a share of GDP, would increase to 42.1 percent in 2031.
The 4.5 percentage point difference in the tax burden, first noted in The Telegraph, compared to when Labor takes power in 2024, is about three times greater than France’s tax burden.
In his first two Budgets as Chancellor, Reeves raised more than £65 billion in taxes in a bid to provide better pay to public sector workers and shore up the public finances.
The next few months will raise questions about the health of public finances following the impact of the war and how further funding for defense can be provided.
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