Faisal Islam: Reeves will need her hard hat for the next 12 weeks


I also put to her the very interesting words of the Office for Budget Responsibility (OBR) in July, on levelling with the public that “promises made are constantly not kept” on tax and spending.

There was the mildest air of annoyance with the forecaster whose analyses are so critical to the Budget process.

“The OBR have got an important job to do and their job is to produce four forecasts on the economy – not to give a running commentary on government policy,” she replied.

While the chancellor has been a massive supporter of the OBR, granting it more independence, this nerdy point could reflect some looming tension over its assessment of her economic policies.

Expect some considerable haggling with the OBR from the freshly recruited array of high-powered Downing Street economists.

Reeves will stick to her fiscal rules around borrowing, she says.

But there will be pressure from her backbenchers to fudge them.

What spending reductions could be on the cards? Well, the chancellor did not rule out welfare cuts, even after the remarkable U-turn on disability benefits in July.

She may also be a hostage to fortune in the promise that the Budget will help bring inflation, currently at 3.8%, down.

Many typical measures aimed to raise revenue push it up, and that was the experience last year.

Even as she was asserting control over this crucial Budget process, the bond markets reminded her that they can be just as powerful.

She may well find the message useful in managing her own internal scrappy politics.

It’s going to be a rough ride to 26 November.


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