Some City figures are expecting the Chancellor to deliver another statement in spring setting out fresh cuts or tax measures in response to bond market movement
Downing Street did not rule out the possibility of another budget in the spring but said it was “absolutely” the Chancellor’s intention to only have one big fiscal event a year. Reeves would have to set out how she will give herself additional headroom if the forecast is revised. Pressed on whether she was set on one fiscal statement, the spokesman said: “Yes that’s absolutely right. But at the same time no one should be in any doubt that meeting the Government’s fiscal rules is non-negotiable and the Government will always prioritise that.”
“The fiscal rules are non-negotiable, public services will have to live within their means, we’ve set the budget,” he said. “Those who think the current bout of bond market jitters is down to policies announced in the Budget need to explain why there has been such correlation in the upward march of bond yields both here and in the US.”
Isabel Stockton, a senior research economist at the Institute for Fiscal Studies said: “If recent rises in interest rates were to persist, they could easily erode most of the razor-thin margin against the main fiscal rule.“But the issue here is not so much that the past month has been especially eventful, but more that the margin was so small to begin with.