John Healey has called on his international counterparts to “step up” their co-operation in response to the Middle East crisis and the cost of living, as he attended his first G20 summit.
The new Chancellor set out the UK’s priorities before the meeting of global finance ministers on Monday in Asheville, North Carolina.
Mr Healey urged a need to “step up international co-operation” to deal with a “number of challenges” including the Middle East, energy prices, cost of living and growth.
“Britain faces these global pressures from a position of relative strength, the fastest growth in the G7 advanced nations in the first half of this year, the deficit being cut faster than in any other G7 country,” he said.
“But no country can face these pressures alone. And these shocks are being felt worldwide. They’ve been felt in people’s pockets, in their weekly shops, filling up their cars.
“And so I’m here to work with international partner nations to deepen our economic resilience, to deliver good growth and also to give families and businesses just a bit of breathing space.”
The Chancellor was expected to discuss defence spending during the meeting, but will avoid setting a target date for reaching 3% in the upcoming autumn Budget and is expected instead to set out a pathway to reaching the goal at the 2027 spending review.
At Sir Keir Starmer’s final Nato summit as prime minister last month, he and Canadian Prime Minister Mark Carney agreed that their countries would “co-operate closely” on defence funding mechanisms but stopped short of committing to a merger.
Mr Healey will hold meetings with Canadian finance minister Francois-Philippe Champagne, US treasury secretary Scott Bessent and managing director of the International Monetary Fund Kristalina Georgieva, among others.
The fiscal squeeze facing the new Chancellor before his inaugural Budget has been laid bare after official figures showed Government borrowing unexpectedly rose to £1.8 billion last month.
The Office for National Statistics (ONS) said Government borrowing stood at £1.8 billion in July, £700 million or 68.7% higher than a year ago and confounding expectations.
The hike came despite a record July for income tax receipts.
Inflation also surged to a four-month high of 2.9% in July amid the fallout from the Iran war.
Experts, including the National Institute of Economic and Social Research (Niesr), have warned Mr Healey that he will need to either raise taxes or cut spending elsewhere as pressure on the public finances has left no room for extra borrowing.
The Chancellor has told the Cabinet they must be prepared to make cuts to finance some of the new pledges, and promised his economic plans would be “built on fiscal discipline” and meet the fiscal rules set by his predecessor Rachel Reeves.
