Chancellor warned current fiscal path could see 'deterioration' of public finances

OECD urges Rachel Reeves to shorten fiscal time horizons

Eve Maddock-Jones
clock • 2 min read

Chancellor Rachel Reeves has been cautioned that the UK’s current fiscal path is veering down a concerning path, and she should make near-term changes in the face of her first Budget next month.

The Organisation for Economic Co-operation and Development (OECD) said in its latest report, that the current fiscal rules "may lead to short-termism and to a trend deterioration of public finance". It also warned the chancellor that the "current rules provide clear guidance about the medium-term plan for returning to debt sustainability. But the rolling target window leads to sub-optimal fiscal policy and works against long-horizon public investment". This comes a week after the Office for Budget Responsibility's report warned that current debt projections are on an "unsustainable pa...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Economics / Markets

Bank of England holds interest rates at 4% as Budget looms large

Bank of England holds interest rates at 4% as Budget looms large

Five MPC members voted to hold rates

Michael Nelson
clock 06 November 2025 • 3 min read
Partner Insight: Tariffs are here to stay. What's next for investors?

Partner Insight: Tariffs are here to stay. What's next for investors?

The current outlook for US tariffs is complex and their full impact on growth remains to be seen. Columbia Threadneedle Investments explores what advisers need to know, key events to keep top of mind and how to navigate the uncertainty.

Columbia Threadneedle Investments
clock 23 October 2025 • 5 min read
IFS: Reeves must plug £22bn fiscal hole to restore 'tiny' headroom

IFS: Reeves must plug £22bn fiscal hole to restore 'tiny' headroom

Think tank urges chancellor to avoid 'limping from one forecast to the next'

Linus Uhlig
clock 16 October 2025 • 2 min read