John Healey used his first John Healey G20 summit appearance to call on fellow finance ministers to deepen international co-operation on the Middle East, energy prices and the cost of living, while facing growing pressure at home over the state of the public finances ahead of a Budget on 28 October.
The G20 is a grouping of the world’s twenty largest economies, whose finance ministers meet periodically to coordinate responses to global economic challenges. Healey set out the UK’s priorities before the gathering in Asheville, North Carolina on Monday.
What Healey said at the G20 summit
‘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 told counterparts. He went on to say that no country could face such pressures alone, adding: ‘These shocks are being felt worldwide. They’ve been felt in people’s pockets, in their weekly shops, filling up their cars.’
His stated aim at the summit was 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.’
Defence spending was also on the agenda in Asheville. Healey is not expected to announce a target date for reaching 3% of GDP on defence in the October Budget. According to The Guardian, the government will instead use the 2027 spending review to set out a pathway toward meeting its Nato commitment of 3.5% of GDP on defence by 2035, and will set a target date to reach 3% as part of that plan.
On the sidelines of the summit, Healey was scheduled to hold meetings with Canadian finance minister Francois-Philippe Champagne, US treasury secretary Scott Bessent and Kristalina Georgieva, managing director of the International Monetary Fund, among others.
Borrowing figures add to Budget pressure
The backdrop to Healey’s first John Healey G20 summit is a difficult one domestically. Official figures from the Office for National Statistics (ONS) showed government borrowing rose unexpectedly to £1.8 billion last month, some £700 million, or 68.7%, higher than a year earlier. The increase came despite a record month for income tax receipts.
Inflation also climbed to a four-month high of 2.9% in July amid the fallout from the Iran war, piling further strain on households already stretched by higher costs at the shops and the petrol pump.
The National Institute of Economic and Social Research (Niesr) is among those to have warned 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. Healey has told Cabinet that ministers must be prepared to make cuts to finance new pledges, and has promised his economic plans will be ‘built on fiscal discipline’ and will meet the fiscal rules set by his predecessor.
At Sir Keir Starmer’s final Nato summit last month, Starmer and Canadian Prime Minister Mark Carney agreed their countries would ‘co-operate closely’ on defence funding mechanisms, though they stopped short of committing to a merger. The relationship with Ottawa is likely to feature again when Healey sits down with Champagne on the margins of the G20.
With the Budget confirmed for 28 October and the spending review pencilled in for 2027, the John Healey G20 summit in Asheville is the Chancellor’s opening move in a sequence of set-piece economic moments that will define the government’s fiscal direction over the coming years.
