Is Reeves brave enough to give the economy the medicine it needs?

Rachel Reeves has wanted to downplay the significance of the Spring Statement this afternoon. But with every leaked proposal and briefing, the statement feels increasingly like a full-blown Budget. Soaring borrowing costs, and a growth forecast set to be slashed in half, have wiped out the Chancellor’s £10 billion headroom against her ‘ironclad’ fiscal rules. Reeves’s statement could now include civil service reforms, NHS productivity measures and an ‘austerity-lite’ stance on future spending.

There will be no major tax decisions, barring a possible extension to fiscal drag. But today’s announcement is a crucial one for the Chancellor. Reeves’s didn’t expect the outlook for Britain’s economy to be so bleak. Yet nearly two decades of economic stagnation have brought the Chancellor closer to the fiscal brink than perhaps any other in recent memory.

Andrew Bailey, Governor of the Bank of England, warned in a lecture on Monday night that the country faces ‘strong headwinds’.