Published by Global Banking & Finance Review®
Posted on March 19, 2025
2 min readLast updated: January 24, 2026
Add as preferred source on GoogleUK finance minister Rachel Reeves plans to announce a rebuilt £9.9 billion fiscal buffer, addressing economic challenges and spending cuts.
LONDON (Reuters) - British finance minister Rachel Reeves is expected to announce next week that she has rebuilt a 9.9 billion pound ($12.83 billion) fiscal buffer, Bloomberg reported on Wednesday citing an unnamed source.
This so-called 'headroom' refers to the projected surplus of revenue over day-to-day non-investment spending by the 2029/30 tax year. Reeves has made balancing this measure of spending and revenues one of her fiscal rules.
The headroom was projected at 9.9 billion pounds by the independent budget watchdog last October, but think tanks have said that was likely to have been wiped out by raised global concerns about inflation and higher borrowing costs, and by Britain's weaker-than-expected economic growth.
Bloomberg cited a source as saying reductions in government expenditure and welfare spending, along with an accounting adjustment from reallocating certain foreign aid expenses to defence, would compensate for the lost budget flexibility.
The Office for Budget Responsibility (OBR) will publish its latest forecasts on March 26, when Reeves will give a fiscal update to parliament.
On Monday, the think tank Resolution Foundation said that Reeves' headroom had probably turned into a 4.4 billion-pound deficit, requiring tough measures in her statement to get her back on track.
The following day, the government announced cuts of more than five billion pounds from the government's welfare budget by 2029/30.
The OBR, Britain's budget watchdog, is expected to cut its 2.0% economic growth forecast for 2025 sharply. The Bank of England last month slashed its projection to 0.75% and the Resolution Foundation predicted a similar figure.
($1 = 0.7718 pounds)
(Reporting by Sam Tabahriti; editing by William James and Alistair Bell)
The main topic is the UK finance minister's announcement of a rebuilt £9.9 billion fiscal buffer and its implications.
The fiscal buffer aims to stabilize the economy amid concerns of inflation and slow growth, with spending cuts to balance the budget.
The OBR is expected to lower its economic growth forecast for 2025, with the Bank of England predicting 0.75% growth.
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