OECD tells chancellor that efforts to cement 'thin' fiscal buffers should be 'stepped up'

UK GDP forecasts also revised downwards

Linus Uhlig
clock • 1 min read

UK Chancellor Rachel Reeves has received another warning that her wafer-thin fiscal headroom ought to be shored up to provide adequate support for the UK economy in the event of adverse shocks.

Having already been urged by the International Monetary Fund to "refine" her fiscal rules, Reeves has now been told to be more fiscally prudent by the Organisation for Economic Co-operation and Development (OECD).  In its latest report, the Paris-based economic forecaster said: "Currently very thin fiscal buffers could be insufficient to provide adequate support without breaching the fiscal rules in the event of renewed adverse shocks."  During her Spring Statement at the end of March, the chancellor restored the UK's £9.9bn fiscal headroom, a move that raised eyebrows at the time aft...

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