Rise in UK borrowing costs could push Reeves to new public spending cuts

Rachel Reeves is expected to present updated OBR forecasts on the economy and public finances to parliament on 26 March. Photograph: Peter Byrne/PA

Rachel Reeves could be forced to make fresh cuts to public spending at her March “spring forecast” as a rise in government borrowing costs risks the chancellor breaking her own fiscal rules.

With the government under pressure on the economy, City analysts warned that Britain’s long-term borrowing costs hitting the highest level since 1998 risked wiping out almost all of a £10bn buffer the chancellor had kept in reserve at the autumn budget.