Overview

• Government borrowing in February 2025 reached £10.7 billion, £4.2 billion higher than forecast, highlighting worsening fiscal challenges.
• The Office for Budget Responsibility is expected to halve the 2025 economic growth forecast from 2% to 1%, compounding fiscal pressures.
• Rachel Reeves has ruled out raising taxes in the Spring Statement, focusing instead on £5 billion in welfare cuts and civil service efficiencies targeting £2.2 billion in annual savings by 2029-30.
• The Labour government faces growing internal dissent and public backlash over welfare cuts, foreign aid reductions, and departmental budget cuts.
• Public debt has risen to 95.5% of GDP, its highest level since the early 1960s, as Reeves seeks to adhere to self-imposed fiscal rules requiring debt reduction by 2029-30.