Prime Minister Andy Burnham faces mounting pressure to address fiscal challenges as a major think tank warns there is no scope for increasing borrowing. The National Institute of Economic and Social Research (NIESR) has cautioned that persistent inflation, driven by the Iran war, will continue to strain public finances. Burnham's recent pledges on defence and cost-of-living measures, including cuts to electricity bills and reduced bus fares, require either tax increases or spending cuts. NIESR deputy director Stephen Millard highlighted the need for fiscal choices, suggesting potential reforms such as adjusting the triple lock on pensions, reforming council tax, or scrapping VAT exemptions. The think tank also forecasts inflation to peak at 3.8% in February 2027 before gradually declining, with interest rates remaining unchanged until 2028. The Treasury has reiterated its commitment to fiscal discipline while investing in public services, emphasizing the importance of economic stability and national security. The article underscores the delicate balance Burnham must strike between his manifesto promises and the realities of public finances.