Significantly higher taxes on the average person would be needed to finance higher public spending in the UK, according to a former Bank of England governor.

Lord King of Lothbury said there “isn’t enough money there amongst the rich to get it back” when it comes to meeting the “strong case” for extra spending in certain areas to help recover from the lockdown.

He added there is also a need for politicians to “front up” and explain the consequences of soaring inflation, the reduction on living standards caused by confronting Russia’s invasion of Ukraine, and helping future generations cope with the increased national debt.

Asked if this will feel similar to the recent era of austerity instigated by former Conservative chancellor George Osborne, Lord King replied: “In some ways it could be more difficult.”

He added on BBC One’s Sunday With Laura Kuenssberg: “I think everyone can see there is a strong case for higher public spending in certain areas as we recover from the lockdown period and in many ways people are very good at identifying areas where public spending should be higher in the longer term.

“The challenge is if we want European levels of welfare payments and public spending, you cannot finance that with American levels of tax rates.

“So we may need to confront the need to have significantly higher taxes on the average person.

“There isn’t enough money there amongst the rich to get it back.”

Lord King earlier outlined the challenge for the next prime minister and Opposition to confront high inflation, the scale of public debt and the need for the country to save more.

He said: “The big challenge, I think, is the best way to improve national savings is to reduce the size of the Government budget deficit and that’s a major challenge for both parties.”

Lord King noted public expenditure is not going down and is likely to increase, adding: “Therefore taxes will have to rise to fill the gap which is there at present.

“That doesn’t make a very happy picture for the next few years but what we need is a government that will tell us honestly there is a reduction in our national standard of living because we’ve decided to help Ukraine and confront Russia, and that means all of us are going to have to share the burden – we can’t just put all of it on our children and grandchildren.”

Lord King said mortgage rates are “clearly going to go up” but noted this was also happening elsewhere in the world.

He added all central banks “made the mistake” during the lockdown period of “thinking that they should print a lot of money to support the economy”.

Lord King went on: “Whereas in fact with the economy contracting under lockdown, that was the wrong policy and all central banks – not just ours but the Federal Reserve, the European Central Bank – are all facing now very high inflation rates of close to 10%.

“We’re all in the same boat.”

In a message to politicians, Lord King said: “Time to front up, to have a narrative that explains to people the consequence of: a) allowing inflation to pick up; b) confronting Russia and supporting Ukraine, which has reduced our national standard of living; and c) the need to help future generations cope with the increased national debt we are leaving to them.”

Labour leader Sir Keir Starmer, speaking on the same programme after Lord King’s remarks, said an incoming government is going to have to “pick up a real mess of our economy of the Tories’ making”.

He was asked to go into detail on policy areas for a Labour government and noted they would have to face “tough choices” that means they “can’t do some of the things we want to do as an incoming Labour government as quickly as we would want to”.

Asked what that would involve, Sir Keir replied: “I’m not going to write our manifesto on this programme.”