The IMF said the UK must be candid that financing planned defense increases will
require cuts to other government departments rather than sustained borrowing.
London plans to raise defense spending to 3% of GDP by 2030, a move expected to
require about £11 bln a year; the government has yet to explain how it will fund
the rise ahead of next year’s spending review. IMF officials at their annual
meeting in Bangkok warned that high debt levels make further borrowing
unsustainable and said savings should come from other budgets, while tax
increases could have adverse economic effects.
