Rachel Reeves Faces Political Fallout Over £14 Billion Spending Cuts

The Chancellor's Spring Statement sparks internal dissent and raises fears of tax hikes as downgraded growth forecasts and global risks strain the UK economy.

• Rachel Reeves announced £14 billion in spending cuts and welfare reforms to restore fiscal headroom, with the Budget Responsibility halving 2025 GDP growth forecasts to 1%.
• Impact assessments reveal the welfare reforms will push 250,000 people into poverty and reduce benefits for three million households, prompting backlash from Labour MPs and campaigners.
• Economists warn that Reeves may need to raise taxes in the autumn budget to address fiscal risks, especially as Donald Trump’s proposed tariffs threaten to eliminate the fiscal buffer.
• The Chancellor pledged £2.2 billion in additional defence spending and outlined planning reforms projected to deliver 1.3 million new homes over five years, slightly below Labour’s target.
• Internal party dissent grows, with some Labour MPs threatening to vote against the welfare cuts in May, highlighting political risks for Reeves and the government.

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