Chancellor Rachel Reeves is facing mounting political pressure as she prepares to defend last week's budget amid a deepening controversy over claims about the UK's financial deficit.
OBR revelations challenge Treasury narrative
The Chancellor finds herself at the centre of a political storm after the Office for Budget Responsibility (OBR) revealed it had provided more optimistic forecasts about the UK's financial position than previously acknowledged. According to the budget watchdog, they informed Reeves as early as 17 September that improved tax revenue from rising wages and inflation meant the projected shortfall was smaller than initially thought.
The situation intensified when the OBR confirmed it had told the Treasury in October that the deficit had been completely eliminated. This disclosure directly contradicts Reeves' public statements made in a 4 November speech, where she suggested that poor productivity growth would necessitate tax increases to meet her self-imposed fiscal rules.
Political fallout and investigation calls
The timing of these revelations has sparked significant controversy, with opposition figures accusing the Treasury of misleading the public. The Conservative party has gone so far as to accuse Reeves of "market abuse" - a civil offence that carries serious implications.
Opposition politicians are now urging the Financial Conduct Authority (FCA) to investigate whether the Treasury deliberately deceived the public about the state of Britain's finances ahead of the budget announcement. Downing Street has strongly denied these allegations, maintaining that Reeves did not mislead anyone about the country's financial situation.
Starmer's backing and future plans
Despite the growing controversy, Prime Minister Keir Starmer is expected to throw his full support behind the Chancellor's budget in a speech scheduled for Monday. Sources indicate Starmer will argue that the budget measures will help ease cost of living pressures and contribute to lowering inflation.
The Prime Minister is also reportedly planning to announce ambitions to go "further and faster" in encouraging economic growth, signalling the government's determination to push ahead with its economic agenda despite the current political storm.
Reeves is expected to face tough questioning about the discrepancy between her public statements and the OBR's revelations during Monday morning's broadcast rounds, setting the stage for a crucial day in UK politics.
