Rachel Reeves is facing a serious financial headache ahead of her Spring Statement — a whopping £15 billion shortfall that’s opened up thanks to lower-than-expected tax income and higher borrowing costs. And the catch? Labour has pledged not to borrow more for everyday spending or hike taxes before 2030, so her options are already looking painfully limited.
Government spending has ballooned to a staggering £1.27 trillion for 2024/25, with welfare taking the biggest slice of the pie at £313.5 billion. That alone gives a sense of how tight things are — there’s not exactly a lot of wiggle room left. And with growth 1.2% lower than it was back in October, Reeves now has to work out how to plug the gap without leaning on more borrowing or asking taxpayers for more, as reported by the Express.
