Headlines
UK's Reeves plans to build bigger budget buffer - Telegraph
Published by Global Banking and Finance Review
Posted on October 12, 2025
2 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on October 12, 2025
2 min readLast updated: January 21, 2026
Rachel Reeves plans to expand the UK's fiscal buffer, potentially requiring tax increases, to safeguard government finances against future economic shocks.
LONDON (Reuters) -British finance minister Rachel Reeves plans to build up a bigger buffer against her main fiscal rule at next month's budget in an effort to better insulate government finances from future shocks, the Sunday Telegraph reported.
Reeves said in her March spring statement that her spending and tax plans would leave a 9.9 billion pound ($13 billion) fiscal buffer against her main target of balancing day-to-day public spending with tax revenues by 2030.
Since then the government's borrowing costs have risen by more than expected, a plan to save 5 billion pounds a year in welfare costs has been dropped and Britain's budget watchdog has suggested it will lower its growth forecasts.
Economic think tanks now expect Reeves to need to raise about 30 billion pounds in tax increases at the November 26 budget.
On Sunday the Telegraph cited Treasury sources as saying Reeves now planned to build up a bigger buffer to better protect government finances from volatility in the bond markets and rising borrowing costs.
That raises the prospect that she will need to raise more in taxes or cut spending to establish a larger buffer. Reeves last year raised taxes by 40 billion pounds, something she said she would not repeat.
Any move to increase the buffer could be welcomed by economists and think tanks which have warned that the tight margin risks speculation of tax rises or spending cuts when the fiscal rules are assessed twice a year, weighing on the economy.
Britain's Treasury department was not immediately available for comment.
($1 = 0.7486 pounds)
(Reporting by Kate Holton;Editing by Helen Popper)
Economic growth is the increase in the production of goods and services in an economy over a period of time, typically measured by GDP.
Explore more articles in the Headlines category
