John Healey has urged G20 states to ramp up 'cooperation' ahead of an increasingly nightmarish Budget.

The Chancellor has been using talks with counterparts in North Carolina to push for joint funding mechanisms that could bolster defence.

Arriving at the summit this afternoon, Mr Healey pointed to the impact of the Iran war on energy prices - saying no country could deal with such shocks alone.

'These shocks are being felt worldwide. They've been felt in people's pockets, in their weekly shops, filling up their cars,' he said.

'And so I'm here 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.'

Mr Healey has met US Treasury Secretary Scott Bessent, as well as Canada's Francois-Philippe Champagne and IMF chief Kristalina Georgieva. 

The gathering comes with the mood already darkening ahead of the Budget on October 28.

The cost of servicing Government debt has been rising, partly due to concerns about Andy Burnham's ability to control spending. 

Figures released last week showed public sector borrowing unexpectedly rising to £1.8billion in July. That was despite a record July for income tax receipts.

Inflation also surged to a four-month high of 2.9 per cent in July amid the fallout from the Middle East chaos.

The Chancellor has told the Cabinet they must be prepared to make cuts to finance some new pledges, with fears taxes will also have to rise

He has vowed to stand by the fiscal rules set by his predecessor Rachel Reeves.

Mr Healey has long been a supporter of multilateral mechanisms for funding defence projects.

Despite quitting as Defence Secretary over the failure to set a timetable for spending 3 per cent of GDP on the military, he is not expected to lay out a schedule for reaching the threshold at the Budget.

Instead Mr Healey will wait until next year's spending review. 

At Keir Starmer's final Nato summit as prime minister last month, he and Canada's Mark Carney agreed to 'co-operate closely' on defence funding mechanisms but stopped short of committing to a merger.