Britain is on 'thin ice,' warns ex-Bank of England chief economist — and it must act to 'appease financial markets'

The U.K. is "on thin ice" ahead of its critical Autumn Budget, according to a former chief economist of the Bank of England, who warned the government must curb public spending and refrain from painful tax hikes. Speaking to CNBC's Steve Sedgwick, Andy Haldane — a member of the central bank's Monetary Policy Committee until 2021 — said there were "perils" running into the budget update, currently scheduled for Oct. 28. "The truth is we are skating on pretty thin ice in fiscal terms, and nothing would be worse both economically and politically than if the ice were to crack beneath our feet," Haldane said. Asked if the metaphorical ice is going to crack, he responded that there is "a risk of that" happening. The "single most effective way" to head off such an event, he added, would be for the government to "appease financial markets" by showing it is "able and willing to take the knife to public spending.""That is the Achilles' heel of this government," Haldane told CNBC. "Unless and until action is taken on that, [Prime Minister Andy Burnham] will remain, alas, in hock to the bond market."Burnham, who replaced Keir Starmer as prime minister over the summer, has previously criticized...