Chancellor Rachel Reeves has declined to rule out the possibility of a full Budget in March, fuelling speculation about potential tax hikes or spending cuts.
When pressed in Parliament, Ms Reeves instead reiterated her commitment to the borrowing rules set out in October, which include balancing day-to-day expenditure with tax receipts and reducing debt as a share of GDP over the forecast period.
Despite having vowed to hold just one Budget a year to provide businesses with predictability, the Chancellor pledged to go “further and faster” amid recent market turmoil. She attributed a sharp rise in borrowing costs to “global movements in international markets” and insisted she would continue meeting the Government’s fiscal rules.
Her remarks followed a politically fraught week, during which the pound slipped and UK bond yields surged — developments that critics blamed partly on Ms Reeves’s trip to China. Speculation about her position mounted on Monday after Sir Keir Starmer refused to guarantee that she would remain as Chancellor until the next general election, although Downing Street later confirmed its confidence in her leadership.
Meanwhile, the latest sale of 30-year inflation-linked gilts saw a small dip in demand compared with a similar auction last year. Lower demand tends to push bond yields higher, potentially adding further strain on the Chancellor’s fiscal room for manoeuvre.
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Reeves leaves door open for March emergency budget
