Will Rachel Reeves bend her fiscal rules to compensate for the books?

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Rachel Reeves was relentless. After the Chancellor steered £ 40 billion in October in October in October and announced an almost £ 70 billion in additional public expenditure, she informed a business audience that she had pulled a line into the sand.

“I am really clear that I will no longer come back with more borrowing or more taxes,” she told the CBI employer organization in November and insisted that public finances are now on “a solid”.

These words have not aged well, since Reeves confronts a summer of speculation that it will be forced to increase taxes or loans or both in order to remain within the claustrophobic limits of their fiscal rules.

Reeves won a certain comfort on Tuesday from the IMF, which said that the Chancellor’s financial strategy was “credible and growing -friendly”. However, it also warned that the delivery of “considerable risks” were associated, which requires additional tax increases or expenditure shortcuts that “occur when shocks”.

The IMF, which promises weeks with the Ministry of Finance Optimize the British fiscal frame Promotion of “political stability” between the budgets.

Problems are increasing: Loan costs Rising and attempts by the Chancellor to save money by cutting services have come across the violent opposition of the public and laboratory MPs, whose tolerance seems to be exhausted for cuts.

Last week, Sir Keir Starrer retired to the government’s 1.5 billion plan to limit the government to limit how many retirement winter fuel payments received. Now he wants to shorten the two-child beefic cap from the conservative from the price of up to another 3.5 billion GBP.

In addition, the forecasts of the sluggish medium -term growth, Donald Trump’s trade wars and a possible downgrading of the office’s productivity forecasts for the budget responsibility and the difficulties of Reeves become clear.

Some economists assume that Reeves’ thin £ 9.9 billion is selected against their tax rules, so that they have to find billions of pounds in order to be able to continue to balance the books.

“The (fiscal) rules are almost certainly broken,” said Stephen Millard, interim manager of the National Institute for Economic and Social Research. He added that re -management of public finances was a problem for the Chancellor because she had undertaken to increase none of the “Big Three” taxes – income tax, national insurance for employees and value creation tax.

“If the Chancellor wants to match the expenditure she planned … then I would be inclined to increase at least the higher income tax rate unless the basic interest,” he added.

“It is quite inevitable that it has to increase taxes because I cannot see that expenses have cuts.”

Isabel Stockton, Senior Research Economist at the Institute for Fiscal Studies, said that the government could still be lucky, but that “certainly likely that there should be something else” in order to do justice to permanent increases in public expenses, such as the scrapping of the two-child beefic limit.

“There are many options, but it is always difficult to increase content amounts in a way that is predictable without touching the three major taxes,” they added.

The allies of Reeves insist that the Chancellor will not use her next autumn budget to free herself from her financial road by appealing her budget rules. “You are not negotiable,” said one. Reeves called it “iron disguised”.

However, the IMF has proposed that the OBR will only conduct one annual assessment of the budget rules – at the time of the budget – and not twice a year.

The fund wants to hire constant public speculation about the tax “headroom” and probably tax increases, of which he believes that they are responsible for bad decisions in the government. IMF civil servants find that no other country in its public finances is obsessed with small movements.

The Ministry of Finance would like to see that, in the opinion of government officials, this would avoid the type of chaos that the Reeves’ spring declaration accompanied in March when it was forced to maintain the savings at the last minute according to the forecasts of the OBR in order to remain within their tax rules.

James Smith, research director of the Resolution Foundation, said that the problem was not only a specific goal, but also the “very historically low level” of the head -free, which meant that the government tightened politics.

The assessment of whether the government fulfills its budgetary regulations is currently an obligatory obligation of the OBR if it draws up a forecast as part of a 2011 parliamentary law. This would have to change, although the government had optimized the OBR’s tasks in 2024 with additional laws.

While this may help the Chancellor to avoid even more tax increases in her spring declaration of 2026, it doesn’t help her when it comes to this year’s budget, which looks more problematic every day.