Chancellor warned current fiscal path could see 'deterioration' of public finances

OECD urges Rachel Reeves to shorten fiscal time horizons

Eve Maddock-Jones
clock • 2 min read

Chancellor Rachel Reeves has been cautioned that the UK’s current fiscal path is veering down a concerning path, and she should make near-term changes in the face of her first Budget next month.

The Organisation for Economic Co-operation and Development (OECD) said in its latest report, that the current fiscal rules "may lead to short-termism and to a trend deterioration of public finance". It also warned the chancellor that the "current rules provide clear guidance about the medium-term plan for returning to debt sustainability. But the rolling target window leads to sub-optimal fiscal policy and works against long-horizon public investment". This comes a week after the Office for Budget Responsibility's report warned that current debt projections are on an "unsustainable pa...

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