Gilt rally offers partial reprieve for Rachel Reeves

In the Unlock the Editor’s Digest, FT Editor Roula Khalaf curates her top stories, including the UK Chancellor Rachel Reeves facing challenges despite a fall in borrowing costs, as the country’s economic outlook worsens. Reeves’ fiscal room for maneuver has improved due to a global bond rally and potential interest rate cuts by the Bank of England, but grim forecasts and lower growth estimates may impact the government’s ability to reduce borrowing rapidly in the coming years. Economists warn that Reeves may need to implement further spending cuts or tax rises to strengthen the UK’s fiscal position, as the Office for Budget Responsibility’s potential growth rate predictions could have significant implications for the government’s budget plans.

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