IMF warns markets are underestimating geopolitical risks; UK faces a ‘narrow path’ on debt reduction – as it happened

IMF predicts UK will grow by 1.1% this year, making it the joint third-fastest G7 country, but debt consolidation will be a challenge

• Treasury warns of difficult decisions in budget after September borrowing rise
• UK interest rates to fall to 2.75% by next autumn, Goldman Sachs predicts

UK borrowing would have been even higher last month, without Rachel Reeves's unpopular decision to means-test pensioners' winter fuel payments, and the end of the extra Pensioner Cost of Living Payment given in 2022 and 2023.

Net social benefits paid by central government decreased by 2.0bn in September to 25.7bn.

The usual increase caused by the annual uprating of inflation-linked benefits was more than offset by reduced spending on Winter Fuel Payments, partly because of the absence of one-off cost-of-living payments, which were included in September 2023 and partly because of the change in eligibility.

We have inherited a 22 billion black hole in the country's public finances, including no plan to fund pay deals for millions of public sector workers. Strikes cost at least 3 billion last year, so it was the right thing to do to end those damaging disputes.

Resolving this blackhole at the Budget next week will require difficult decisions to fix the foundations of our economy and begin delivering on the promise of change."