Bigger tax hikes and spending cuts on the way, Reeves signals

Rachel Reeves has signalled she wants to build a bigger reserve of cash at the Budget to avoid breaking her borrowing rules in future – paving the way for higher taxes or deeper spending cuts.

The Chancellor has promised to double down on her efforts to stabilise the public finances after a year in which markets have expressed concern at the ability of the Government to repay its debts.

And she said she wanted “sufficient headroom” to protect the UK’s economy against volatility in the years to come.

Treasury insiders acknowledge that building in a higher buffer would come with trade-offs because it would require more aggressive action on tax and spending measures at the Budget to reduce borrowing. New Feature

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