Iran war threatens Healey's Budget plans, think tank warns

The price spike caused by the US-Israel war in Iran poses a major challenge for Chancellor John Healey as he puts together his first Budget, an influential think tank has warned.

Higher-than-expected inflation could eat into what the government hoped to spend on public services, meaning Healey will have to choose between spending cuts, tax rises, or a mixture of both, the Institute for Fiscal Studies (IFS) said.

It urged the government to ensure its spending plans are credible, as opposed to proposing unrealistic future cuts to make the Budget add up.