Healey faces £24bn spending squeeze as inflation puts tax rises in play

Healey faces £24bn spending squeeze as inflation puts tax rises in playThe Bank of England has held interest rates. Chancellor John Healey is facing a £24bn real terms squeeze on the public purse due to higher inflation and will be forced to hike takes to fund the government’s spending plans, a top think tank has warned. The latest forecast emphasised higher inflation would erode raw spending plans by the government. Tax fears mountNiesr’s upgrade to its inflation forecast raised questions about whether the Bank of England could hike interest rates. He said higher interest rates would be “insurance against the possibility of further price rises coming” and ensure that wage growth pressures remain subdued.