Reeves faces a reduction in consumption or increasing taxes because the Green Britain’s growth disappoints

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Chancellor Rachel Reeves is faced with the appearance that he has to reduce public consumption or increase tax after a fiscal guard in the UK has privately warned of less economic prospects.

Preliminary forecasts of the Budget Responsibility Office show that the fiscal head space that Reeves wiped out to factors in October against its key budget rule, including poor economic data, according to people familiar with this issue.

The forecasts, which were sent to the treasury last week, could force the chancellor on a pen in a firmer spending of government departments or find additional tax revenue in her spring statement on March 26.

It comes after a growth period of growth in the UK, with an increase in government borrowing costs that have thrown out Marž against the Reeves rule, which provides that current consumption that excludes investments is funded by tax income.

The first draft forecast of the ORA, which will be published with a spring statement, reflects the development in the economy from the Reeves budget for October, but not the impact of any potential change in politics.

In October, the OR forecasts showed that Reeves had £ 9.9 billion against her head against her rule that the current budget would be in balance by 2029-30. tank.

The new preliminary forecasts are suggested that the head space has been deleted, people have said to be introduced to this question. The reduction was first reported by Bloomberg.

The forecasts of the fiscal guard should change because there will be four more drafts before the prospect of the play to Parliament on March 26.

Reeves will have the opportunity to renovate an interpreter from the current budgetary rule through taxes and consumption decisions ahead of the spring statement.

But the forecasts of other bodies, including the Bank of England, already point to the severe economic prognosis of the chancellor.

Boe halved his growth assessment last week in 2025 years, saying that the economy is expected to expand this year by only three-quarters of the percentage point-founded UC prediction of 2 percent.

The Ernst & Young Club, another forecaster, envisaged a growth of only 1 percent in 2025.

Boe predicted a growth of 1.5 percent in 2026, which is also below the latest prognosis of ORA 1.8 percent.

Estimation of OR -Ao potential growth – the speed at which the economy can expand without initiating inflation, and the key entry into its forecasts – are also more optimistic than those of other analysts.

Although the latter expects that potential growth will be greater than 1.6 percent to the end of its forecast period, its own BOE estimation is lower, 1.5 percent.

In addition, an increase in gilded yields because the October budget has further suppressed Reeves’ head space, although the recovery of the bond market has mitigated some of the influence.

Oxford Economics analysts, consulting, last week estimated that Reeves’ 9.9 billion pounds of head space halved with the movement of bond prices.

HM spokesman said: “Government commitment to fiscal rules and healthy public finances cannot be negotiated.

“As announced earlier, the next prognosis of OR will be presented to parliament on March 26 with a chancellor statement. We do not comment on the speculation about the forecast of the OR.”

Spokesman Oba -refused to comment.