Overview
- Speaking in Riyadh, Rachel Reeves told investors she is prepared to use tax and spending decisions to widen fiscal headroom and uphold her fiscal rules.
- The Treasury announced a £6.4bn set of UK–Saudi commitments, including up to £5bn in UK Export Finance support for projects in the kingdom and a new Barclays headquarters in Riyadh.
- Reeves is pressing for faster progress on a Gulf Cooperation Council trade agreement that officials estimate could add about £1.6bn a year to UK GDP and lift wages by roughly £600m in the long term.
- Reports indicate the OBR is set to cut its trend productivity forecast by about 0.3 percentage points, a shift that could enlarge the fiscal gap by more than £20bn as the IFS says about £22bn is needed to restore her previous headroom.
- Reeves ruled out a return to austerity, framed investment as the route to higher productivity, linked elevated UK inflation partly to post‑Brexit trade frictions, and Downing Street defended engagement with Saudi Arabia despite rights concerns.