Pubic sector pensions and the NHS budget must be key targets for ministers battling to balance the books, the International Monetary Fund (IMF) has warned. The IMF warned the Government it would have to reign in health spending and tackle retirement plans for public sector workers, as well as deliver cuts to spending plans. The group made its recommendations after chancellor Alistair Darling set out his fiscal rules, which he believes will help reduce the £175bn deficit run up by the recession and banking crisis. But Olivier Blanchard, the IMF's economic counsellor, said he had not gone far enough. ‘It means reforms of the retirement system. And that means reforms of the healthcare system,' he said. ‘These reforms have basically to be confronted. The idea of (just) introducing these fiscal rules and not doing these reforms is a joke.'
