Reeves says UK fiscal headroom has increased since November
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Prices of food are displayed at the Borough Market as the UK inflation rates fall by less than expected in London, Britain May 22, 2024. REUTERS/Maja Smiejkowska
LONDON, March 3 (Reuters) - Britain's government has a bigger margin for error for meeting its main fiscal target at the end of the decade, finance minister Rachel Reeves said on Tuesday, citing new forecasts from the Office for Budget Responsibility.
The government's expected tax revenues were due to stand at 23.6 billion pounds ($31.4 billion) above projected day-to-day spending in the 2029/30 fiscal year, Reeves said in a budget update speech to parliament.
At the time of her last full budget announcement in November, the so-called fiscal headroom was estimated to be almost 22 billion pounds.
The OBR's forecasts were made before this week's surge in borrowing costs in financial markets triggered by the U.S.-Israeli war against Iran which has pushed up energy costs and could fuel inflation.
But Reeves said they did include spending commitments made since the last budget.
($1 = 0.7509 pounds)
(Writing by William Schomberg and Kate Holton; Editing by Hugh Lawson)
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