Macro-financial risk
2026-04-26
10 minute read
10 sources
UK Labour Year Two: Reeves, the Fiscal Lock, and the 2026 Spending Choice
Twenty months in, Rachel Reeves has redefined the borrowing rules, raised employer National Insurance, and committed to a 100 billion pound capital programme. The arithmetic for the 2026 Budget is unforgiving and the politics are tighter still.
Keir Starmer's government enters its second full fiscal year with the choices set in October 2024 hardening into a path. The 40 billion pound revenue raise was anchored on a 1.2 percentage point employer National Insurance increase and a lower secondary threshold. The 100 billion pound capital uplift over five years was made affordable on...