Reeves to pressure public spending in the spring statement

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UK Chancellor Rachel Reeves plans to pressure the new public spending with billions of pounds in the spring statement next week, after announcing on Tuesday at a value of 5 billion pounds in luxury discounts.

Reeves is looking for More discounts To fill a hole in public financial affairs and will be cut off budgets for the Whitehaoul departments later in Parliament, according to officials who have been launched.

Sir Kerr Starmer, the Prime Minister, ruled out a return to “austerity”, but officials say that Reeves has always indicated that she would “adjust” spending plans if the economic outlook worsened.

“The world is changing,” Reeves said this week.

After fueling a short -term batch of spending with a tax increase of 40 billion pounds in the October budget, Refiz On average average of 1.3 percent in real spending from 2026-27 onwards.

Reducing real growth in spending in daily departments to about 1.1 percent will save the treasury about 5 billion pounds annually by the end of Parliament, according to the Institute of Financial Studies, based on inflation expectations in October by the Budget Responsibility Office.

This growth rate is still marginalized in the previous spending plans for Chancellor Jeremy Hunt before the elections.

The high government borrowing costs and anemia growth increased in Reeves plans; Economists expect the increasing expectations from most or all of 9.9 billion pounds from the head room that they had to meet its financial budgets in the October budget will stop.

One of the government officials said that the financial markets expect Reeves to restore a “reasonable level of introduction” Spring statement Next Wednesday; One of the financial rules says that the current spending must meet tax receipts in 2029-30.

Reeves rejected calls by Backbench Labor MPS to reduce financial rules and its allies do not expect the counselor to fill the gap with the tax height. This leaves more strict pressure on Whitehal’s sections already linked to criticism.

Last week, one of the ministers protested the restrictions of spending at the cabinet meeting, but the governmental informed insist that the focus on reform means that public services can be preserved even if spending growth rates are reduced.

Last week, Starmer promised a better value for money with civil service reforms and spreading more technology. “Every pound spends, every list, every decision must be taken for workers,” he said.

Reeves risked charges by the Left Labor Party representatives of financing public services at a level similar to that plan – but its allies insist that the advisor has “reliable plans” to obtain a better value for money.

One of them said: “The difference is that we have made plans on how to make departments more productive and how we can reduce costs.” “This is not a return to austerity.”

Reeves allies also argue that it is because “loaded” spending is to make urgent reforms, the low growth expected to spend in subsequent years will be easier.

This week, Britain has faced difficult times and that “the increasing global opposite winds, such as the uncertainty, are felt in all fields.”

Government officials say US President Donald Trump’s wars can “bomb all our plans outside the path.”

In October, REEVES laid out spending plans in departments from 2025 to 20, with allocations 2026-27 on the rising that are scheduled to be announced in June.

REEVES will get some flexibility due to Starmer’s decision to raid the external aid budget to finance a height of 6 billion pounds in spending on defense by 2027.

Part of this spending is likely to be treated as capital expenditures, which are not counted on the Reefs Financial Base that requires it to register a surplus in the current budget in 2029-30.

Economists emphasized that in order to be reliable with financial markets, the advisor will need to start achieving savings during the upcoming comprehensive spending period, instead of overcoming the most severe discounts at the end of Parliament.

Ben Zaranko said in The IFS Think-Tanks that Reeves can adhere to the growth of 1.3 percent in real annual spending over three years and then pencil in “discounts at the end of Parliament.”

He added that this may cause allegations that they are guilty of “financial imagination” – a criticism of the narrow spending plans that Hunt does not specify.

A Treasury spokesman said: “The government’s commitment to financial rules and proper public financing is not negotiable,” a Treasury spokesman said.

As was previously announced, the following expectations (OBR) will be presented to Parliament on March 26, along with a statement from the advisor.