The UK Treasury has prepared several billion pounds in draft spending cuts across welfare and government departments, anticipating diminished flexibility for Chancellor Rachel Reeves. With global economic uncertainties reshaping forecasts, the Office of Budget Responsibility (OBR) is set to reassess the financial headroom from last October's Budget. The OBR's upcoming forecasts reflect a changing economic landscape, exacerbated by factors like lower productivity and international trade tensions. Internal sources blame these trends for higher government borrowing costs, indicating a significant shift in fiscal strategy toward balancing public finances.
"Clearly the world has changed a lot since the autumn Budget. People are watching that change happen before their eyes."
"The Treasury will inform the OBR of its 'major measures' - essentially changes to tax and spend to put public finances back on track."
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