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Sir Keir Starmer experienced a cabinet uprising on the planned cuts for prosperity and other public expenditures, but the Prime Minister insisted that “difficult elections ve and said that MPs would not bend the British financial rules to allow further borrowing.
The government said that the ministers expressed their concerns about interruptions at a cabinet meeting two days ago and protested the expenditure discounts planned in most of their departments.
However, the ministers also marked concerns about the planned welfare cuts, which Starmer claimed to be necessary to make a reform of a “unanimous” system, which he claimed to have left many people imprisoned for benefits.
The Prime Minister said he was aware of the anger on his colleagues on the suggested interruptions, and his spokesman did not deny that a series of ministers announced his concerns on Tuesday.
A government said that the participants of the meeting spoke the “minority ,, but the chancellor Rachel Reeves added that it was a definite support to adhere to the financial rules.
“There was a lot of support for financial rules, but not for difficult elections in the policy areas of individual ministers,” he said, a government official told the Financial Times. The unrest of the Ministry was first reported by Bloomberg.
Reeves is determined to push the welfare cuts that workers’ officials say they can save £ 6 billion per year. He presented plans to the office for budget responsibility.
The financial guard dog will have to evaluate how reforms are “scored için before Reeves produced final financial forecasts in Reeves’s Spring declaration.
Starmer, workers’ deputies, Britain’s borrowing taps to follow Germany to follow the party pressure, despite the party pressure, Britain’s financial rules will not relax to prevent painful welfare cuts warned.
The Prime Minister agreed that the British financial rules should be respected, and admitted that he would scare the markets and force the borrowing costs to any relaxation of self -imposed restriction.
“Markets are still testing us,” he said, a senior government official. “The decisions we make are under an important examination.”
Germany’s decision to loosen the rules of borrowing to finance defense and infrastructure projects increased the pressure on re-looking at the rules that require its balance to balancing existing expenditures on Reeves until 2029-30.
As the Minister of Overseas Development last month, Anneliese Dodds, who interrupted the aid budget, said in his letter to Starmer that he expects that we will discuss our financial rules and taxation approach as collectively, as the other nations do ”.
Reeves ordered a deduction to finance an increase of 2.5 percent from 2.3 percent of GDP in 2027 to 2.3 percent of GDP in 2027. He said that the financial rules were ılmız unharged ”.
John McDonnell, the former Shadow Chancellor, told Financial Times that the rules should “relax”. He said Reeves’ restrictions require the welfare law to cut more than the conservatives.
Other main labor deputies, who have recently been invited to Downing Street in recent days to be informed about the planned welfare cuts, say that there is a widespread debate of financial rules within the party.
Someone said: “Cutting prosperity is difficult for labor deputies, the most difficult thing we want to swallow. Talk about the relief of financial rules, foaming under it and to break the surface. “
Starmer’s ally, if Britain follows Germany by loosening the financial rules, then the increase in the British borrowing costs brought by the markets will be punished.
First, he said: “Germany’s 62 percent debt / GDP rate, ours have approximately 95 percent. There are open differences. “
Street presentations in welfare cuts were directed by Claire Reynolds, President of Starmer’s Parliamentary Labor Party. He said that a participant who believes that a participant who believes in number 10 could be “a little softening üzerinde on some measures that the deputies who are often loyal were“ really angry ”.
Economists say that Reeves’ public finance plan is blown out of the course with increasing borrowing costs and slow growth combination, and some expect some to reduce expenditures in spring declaration or increase taxes at least 10 billion.
In October, it allowed a ceiling gap of 9.9 billion pounds against financial management, but it is thought to have been erased. Welfare deductions and other expenditure discounts are planned to provide a pillow against worse news.
Nicolas Trindade, a senior portfolio manager in AXA’s investment management branch, warned Reeves that he cannot manage the economy with a ceiling gap of only 10 billion pounds ”:“ It just doesn’t work and get the same problem over and over again. ”
Investors said that any movement will be taken weakly by the market to relax the financial rules that have recently been changed until October. Britain’s concerns about higher UK borrowing concerns about the UK’s 10 -year borrowing costs in January with a global bond to increase the highest level of 16 years to the highest level of 16 years.
On Thursday, they remain almost one percent of the place where they are in mid -September in a little less than 4.7 percent, and it can be compared to those reached at the summit of the market crisis following the malicious “mini” budget of conservatives in 2022.
British economist James Smith, Ing, said, “The British treasury was caught in a ties,” he said. “Higher debt interest costs mean painful expenditure cuts in the spring statement on March 26th. And more tax increase seems more and more later in the year. “
