Chancellor Rachel Reeves is reportedly gearing up for some tough decisions this spring, with plans to cut Whitehall budgets by as much as 11%.
This comes as the government tries to stick to its fiscal rules while dealing with high borrowing costs and lower-than-expected growth forecasts.
The £9.9 billion financial cushion Reeves created in her October Budget has been wiped out, leaving her with little room to maneuver.
The Treasury has asked several government departments to prepare for potential budget cuts as part of a spending review due in June. These cuts could have a significant impact on public services, though details are still emerging.
At the same time, Prime Minister Keir Starmer is under increasing pressure to boost defence spending to 2.5% of the economy, up from the current 2.3%.
This push comes amid growing concerns about global security and the need to modernize the UK’s armed forces. However, with budgets being squeezed, it’s unclear how this increase will be funded.
Reeves has already faced criticism for her first Budget, which included £40 billion in tax rises. Many Brits are unhappy with these decisions, with an Ipsos poll showing that half of respondents feel less confident about economic growth as a result.
Two-thirds of those polled also disagreed with the decision to cut winter fuel payments for millions of pensioners, a move that has sparked widespread backlash.
Despite the challenges, Reeves has defended her approach, saying that turning around more than a decade of poor economic performance won’t happen overnight.
She emphasized the need for reforms in areas like planning, regulation, and pensions to encourage investment and boost growth. “We need to go further and faster to improve our growth performance and make working people better off,” she said last week.
As the government prepares for these difficult decisions, the public is watching closely. Will these cuts and reforms lead to the stability and growth Reeves promises, or will they add to the struggles many are already facing? The coming months will be crucial in determining the direction of the UK’s economy—and the government’s ability to deliver on its promises.
