- The Institute for Fiscal Studies (IFS) has warned that Labour's crackdown on immigration could force Chancellor Rachel Reeves to raise taxes.
- A sharper-than-expected fall in net migration risks harming economic growth and reducing tax revenues, potentially leading to a difficult Autumn Budget.
- The IFS suggests that if net migration continues to fall below official forecasts, Ms Reeves might be compelled to increase taxes or cut public spending to balance the books.
- New immigrants disproportionately contribute to the tax base and are less likely to utilise health and care services, making their reduced numbers a significant financial concern.
- This warning comes ahead of Ms Reeves' spring statement, where updated forecasts are expected to highlight potential risks to the UK economy and government finances.
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