Rachel Reeves Unveils Bold Budget Strategy Amid Economic Pressures

British finance minister Rachel Reeves announced that she will deliver her annual budget on November 26, with a strategic focus on maintaining stringent control over public spending. This move aims to curb both inflation and borrowing costs, amid heightened financial market scrutiny of Britain's fiscal management.

The UK's inflation rates are currently the highest among the Group of Seven, constraining the Bank of England's ability to reduce interest rates. Reeves acknowledged the economic challenges, emphasizing, "Britain's economy isn't broken. But I know it's not working well enough for working people." Her plan involves strict adherence to fiscal rules to manage spending effectively.

Reeves is under pressure, alongside Prime Minister Keir Starmer, to address spending demands against weak economic growth and pre-election commitments not to increase major tax rates. Despite under 10 billion pounds of headroom in March, she now faces a potential 20 billion-pound deficit due to economic slowdowns and reversed welfare and subsidy cuts. Her strategy will be crucial to balancing spending with tax revenue by 2029/30.

(With inputs from agencies.)