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“Against a highly uncertain global backdrop, Healey stuck to the government’s fiscal rules with £15bn of headroom – allowing a hit to the £23.6bn buffer left by his predecessor, Rachel Reeves, as the conflict drives up the UK government’s borrowing costs.”

“…st be covered by tax receipts, and the investment rule that government debt, defined as public sector net financial liabilities, must be falling as a percentage of GDP in the third year of the forecast. - The government will have £15bn of headroom in 2029-30…”

“Government borrowing in this financial year has fallen compared with 2025-26, but not by as much as the Office for Budget Responsibility estimated in March, mainly owing to higher debt financing.”

“However, he has also warned that the government has limited resources to intervene as the Middle East conflict pushes the UK’s borrowing costs to the highest level in decades.”

“However, he warned that the government had limited resources to soften the global economic shock hitting Britain.”

“Rising inflation has made it a lot more expensive for governments to finance their debts.”

“In recent weeks, Trump has attempted to downplay his administration’s role in price increases, pointing to the Iranian government as the cause of the squeeze.”

“Medium-term borrowing costs for the UK government hit a fresh 19-year high on Thursday, as investors continued to offload global bonds amid fears of rising inflation.”

“Three weeks ahead of John Healey’s budget, the Joseph Rowntree Foundation said Britain faces a “dire” outlook unless the government takes “bold policy action”.”

“The yield on five- and 10-year UK bonds also rose, driving up the government’s borrowing costs and adding to the pressure on the chancellor, John Healey, before the budget later this month.”

“It is a brave party leader who is prepared to go into an election promising a multibillion-pound new public service – likely to be funded by tax rises or holding back increases in the state pension.”

“A series of global economic shocks, including the Iran conflict, have put the UK economy under intense inflationary pressure and pushed up borrowing costs, leaving the government limited room for manoeuvre.”

“It is unclear if taxes or borrowing would have to rise, or other government spending cuts.”

“But Healey refused to recommit to the interim target when he was appointed to the Treasury by Burnham a month later, raising questions that the new government was backloading spending increases until after the next election.”

“It may be even more controversial given that a pay measure which has been boosted by public sector wage awards is helping drive up the state pension bill at the same time as the government is already under pressure to contain spending and borrowing.”

“In general, suburbs that previously recorded the biggest price increases also cooled the fastest.”