Burnham warned that there is no limit to increase the loan

Prime Minister Andy Burnham will need to raise taxes or cut spending to meet his defense and cost-of-living pledges, a major think tank has said.

Since taking office, Burnham has announced a series of new measures, among them Reduces electricity bills And Bringing the bus fare cap back to £2 in most parts of England.

But the National Institute for Economic and Social Research (NISR) has warned that public finances will continue to experience more persistent inflationary pressures as a result of the Iran war.

Burnham questioned whether he had “fully thought through” how his promises would be paid

“There’s clearly no scope to increase lending, so it’s about choices,” said Stephen Millard, NISR’s deputy director of macroeconomics.

Labour’s manifesto pledge not to raise taxes on workers – income tax, VAT etc National insurance contribution – Burnham says he supports it.

Millard said Nisr was advocating supporting cost-of-living measures with higher taxes — “tax reform rather than higher marginal rates” — or spending cuts.

He said: “People have talked a lot about the charity bill – it’s an obvious place to look.

“The triple lock on retirement, it’s very, very expensive, and it gets more expensive as we get older.”

He also suggested that council tax could be reformed or some exemptions from value added tax to move to a land value tax system.

“After all this, I’m afraid I won’t break the promise of the manifesto and refer to the income tax rate.”

Nisser said on Wednesday that inflation would continue to rise until February 2027, rising to 3.8% before falling back to the Bank of England’s 2% target.

In its latest economic outlook, the think tank said it does not believe the central bank will cut interest rates until 2028.

According to director David Aikman, “treading water is not enough” not to increase the national debt.

“Every major shock this century has increased debt levels, and that increase has not changed,” he said.

The Treasury said the government will follow the budget rules when it invests in “public services that people trust”.

“Fiscal discipline is the foundation of economic stability and national security,” the spokesman said.