What economic levers are left for Reeves to pull?
A prediction is just an estimation, but the importance of pessimistic analysis by today’s National Institute of Economic and Social Studies (NIESR) is that it reflects the scenarios taken into consideration in the Treasury.
As I wrote last month, this is not just the accumulation of U -turns and the stagnant economic news that directs the framework of another important treasure moment in autumn.
Chancellor Rachel Reeves can choose to make a strategic decision to reflect existing global uncertainties by establishing a significant more space for the maneuver to hit the borrowing limits.
Currently this buffer is very tight £ 10 billion.
The NIESR report points to the need to rebuild what he calls “a big buffer” against missing his financial rules.
The absence of this led to what NIESR’s “long -term economic uncertainty” led to what is called “piece politics tinking”.
Therefore, it can now be a movement to get worse news from the road to break the apocalypse cycle of people waiting for policy changes and tax increases.
Borrowing rules predict that daily government costs will be paid by tax income, and the debt according to borrowing and borrowing should decrease as the share of national income until the end of this parliament in 2029-30.
NIESR does not propose that the newly established new debt rules be changed at this stage.
The International Monetary Fund (IMF) and others have the idea that the Treasury should only make budget changes once a year to stop uncertainty.
The IMF also proposed larger bumpers as the best idea.
All of this is important, because previous estimates can mean bridges of a budget gap of £ 15-20 billion per year with tax increases or expenditure deductions in autumn.
Niesr’s 40-50 billion pounds of space estimated on the pessimistic side and still before autumn, there are many moving parts, but show that the scale of the challenge is not alleviated for the chancellor.
Most expenditures were now corrected and the political challenges on welfare cuts would leave the tax increases as the main branch.
While promising that it will not change its main tax rates, the government points to the scope of further increasing income through NIESR, VAT, Pension allowances, changes in the Council tax and extension of the ice cream in the income tax thresholds.
If Niesr is right, all of the above may be.
Of course, economic news has been mixed in recent weeks.
On Thursday, we will get more information that the UK Bank will decide to decide on more interest rates and publish new economic forecasts.
And next week, important GDP figures for the second quarter are expected to be released and it is expected that Britain is no longer the fastest growing economy of major G7 economies.
