Economists lambast Reeves for 'loose fiscal rules' following restoration of 'miniscule headroom'

IFS, Vanguard and Resolution Foundation

Linus Uhlig
clock • 4 min read

Prominent economists have told members of parliament that Chancellor Rachel Reeves’ restored headroom of £9.9bn will fail to remedy widespread economic uncertainty within markets and across the UK.

Speaking at a Treasury Committee hearing on Tuesday (1 April), director of the Institute for Fiscal Studies Paul Johnson said Reeves' near £10bn buffer "is not enough for confidence that [the UK] will not need adjustments over the next few fiscal events".  During her Spring Statement last week (26 March), Reeves informed fellow MPs that she had made the necessary changes to restore the government's fiscal headroom – the amount of leeway the government has within its self-imposed fiscal rules to increase spending or cut taxes – to £9.9bn.  Friday Briefing: The UK economy may be more fr...

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Linus Uhlig
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Linus Uhlig

Linus Uhlig is a reporter at Investment Week

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