UK Conservative Leader Warns IMF Bailout Risk Amid Rising Borrowing Costs

Kemi Badenoch, leader of the UK Conservative Party, has warned that the country risks a repeat of the 1976 sterling crisis, potentially forcing Britain to seek a bailout from the International Monetary Fund (IMF) if the Labour government under Prime Minister Keir Starmer fails to implement an effective economic growth plan. Badenoch cited rising borrowing costs, fragile public finances, and Labour’s reliance on tax increases as key concerns, calling for welfare spending cuts and offering to work with Labour "in the national interest" to avoid further tax hikes. Chancellor Rachel Reeves of the Labour Party dismissed Badenoch's warnings as "irresponsible" and accused the Conservatives of hypocrisy, blaming them for crashing the economy previously. Economists remain divided on the likelihood of an IMF bailout, with some noting "eerie parallels" to 1976 but others considering the bailout scenario as exaggerated. The debate underscores deep divisions over Britain’s economic future amid market turbulence and the highest borrowing costs in decades. Badenoch urges cooperation for fiscal discipline to prevent the UK from ending up "cap in hand" to the IMF once again.