The UK government reported a surplus of £15.4 billion in January 2023, the highest for that month in over 30 years. Despite this, the figure fell short of the £20.5 billion forecast by the Office for Budget Responsibility (OBR), raising concerns for Chancellor Rachel Reeves about meeting her fiscal rules. Speculation suggests possible public spending cuts or tax increases may be necessary. The OBR will provide an updated outlook for the economy on 26 March, alongside Reeves's Spring Forecast. Economic growth uncertainties and increased borrowing costs further complicate her options.
In order to meet her fiscal rules, the chancellor will need to raise taxes and/or cut spending. The chancellor's headroom had been wiped out.
Most governments in wealthy nations impose fiscal rules to maintain credibility with financial markets, but pressure is building on Chancellor Reeves to adhere to hers.
Collection
[
|
...
]