UK Chancellor Rachel Reeves Unveils First Budget

In her first budget, UK Chancellor Rachel Reeves faces significant challenges in adhering to new fiscal rules, with limited flexibility in borrowing and debt, as indicated by the Institute for Fiscal Studies (IFS). The IFS highlighted that Reeves' budget relies on assumptions about raising fuel taxes and slowing public spending growth, which they deem unrealistic. Reeves aims to balance the budget in the third year of each autumn budget and introduced a 'stability rule' to prevent borrowing for day-to-day expenses. However, experts warn that if economic growth does not materialize, further tax increases may be necessary. The Labour party's budget is seen as an attempt to address the fiscal legacy of the previous Conservative government, which left public finances in disarray. The new investment rule proposed by Reeves could alter how debt is measured in the UK, although the immediate outlook remains precarious.