Overview
- Keir Starmer and Rachel Reeves have not ruled out tax or spending adjustments in the March 26 spring statement to adhere to Labour's fiscal rules.
- The Budget Responsibility's forecast shows Reeves' £9.9bn headroom from October's budget may be erased due to weaker growth and higher inflation.
- Potential measures being considered include extending income tax band freezes, reducing ISA limits, or tightening corporate tax policies.
- Former Bank of England Governor Lord Mervyn King suggests raising the basic rate of income tax as a long-term solution to address the UK's financial challenges.
- Economic analysts predict Labour may opt for minor fiscal tweaks to avoid breaching borrowing limits while maintaining public spending commitments.