Rachel Reeves today had a major setback before her spring statement, in which the watchdog of the treasury rejects her claims for savings from benefits.
The OBR would have taken the estimate of the government that the reforms of work and handicap -hand -outs can curb £ 5 billion of the costs.
Instead, they are appreciated for more £ 3 billion – the rising of a hectic last attempt to find more cuts, despite the assembly of anger of Labor MPs. Another £ 500 million is apparently trimmed from the well -being, with the rest from other areas.
In total, it is assumed that Mrs. Reeves has a £ 15 billion black hole in finances to fill in her commons-set piece during lunch, after the storage economy and rising debt services that were destroyed with her enormous tax and spending autumn budget plans.
The OBR will defeat the growth reasons in two, up to around 1 percent this year, and warns that the living standards will stagnate for the rest of the decade.
The bleak photo puts Mrs. Reeves on the right track to break her own 'tax rules', while she has indicated that the shortage will be drawn up by spending cuts instead of even more tax increases at this stage.
Rachel Reeves today had a major setback before her spring statement, in which the treasury watchdog rejects its claims for savings from the benefits
The OBR will defeat the growth reasons in two, up to about 1 percent this year, as well as warning that the living standards will stagnate for the rest of the decade
In total, it is assumed that Mrs. Reeves has a £ 15 billion black hole in finances to fill in her commons-set piece during lunch, after the fixed-up economy and rising debt services that have caused the costs of debts with her enormous tax and-deductions autumn budget plans
The package – which would be formally signed by the cabinet this morning – was originally planned as a routine update on public finances.
But the tories claim that it is now effective an 'emergency budget', where the government needs a huge change in strategy.
Mrs. Reeves has announced plans in advance to tell Whitehall's departments to reduce the administrative budgets by 15 percent, expected to save £ 2.2 billion per year by 2029-30.
Real terms rise from departmental budgets have been set to be scaled back sharply, although specific decisions are only made until the spending review is completed in June.
This morning there was a glimpse of good news for Mrs. Reeves, because the head of the CPI inflation head was reduced to 2.8 percent – slightly lower than was restricted by analysts.
In a thin -veiled wipe to Donald Trump, the Chancellor tried to blame global challenges for the stuttering performance of the British economy on her watch last night.
“We can see that the world is changing, and part of that change has been increased worldwide in the costs of borrowing the government – and Great -Britain has not been immune to those challenges,” she said.
But a harmful poll has shown that most voters no longer believe that the economic claims of Mrs. Reeves – and her are increasingly blaming for the financial misery of the country.
The more common study showed that more than half of the voters (53 percent) said that Labor lied about his economic plans to gain power and 'always knew that they would not comply with these promises'.
Only 13 percent say Labor has been adhered to his commitments about the economy. Voters are also tired of the constant attempts of Labor to blame the last conservative government, with only 30 percent who say they believe that the Chancellor has been fair about the scale of the tax challenge she inherited.
More than half of the voters think that Labor spends too much time on the fault of the Tories. About 31 percent now blame Labor for the growth risk of Great -Britain, compared to 27 percent, the conservatives blame and 18 percent who quotes global events.
In his prediction in October, the OBR expected GDP to grow by 2 percent in 2025 and 1.8 percent in 2026. Those figures already looked optimistic compared to other bodies.
The Bank of England has halved its growth food for the British economy in 2025 to 0.75 percent in February and earlier this month the OECD reduced the forecast of 1.7 percent to 1.4 percent.
The growth with a lower than expected will lead to smaller tax receipts than previously budgeted.
The last official loan figures for February were £ 4.2 billion higher than the OBR was predicted and during the year the gap seems more like £ 20 billion.
The self -imposed rule of Mrs. Reeves to meet the daily expenditure at the end of the five -year prediction by receipts instead of borrowing would be expected to be met with £ 9.9 billion of main space in the OBR assessment in October.
But the lack of growth and the increased loan costs will eat in that headroom, forcing the Chancellor to take action to ensure that it continues to satisfy the rule.
