The Treasury has earmarked several billion pounds in draft spending cuts to welfare and other government departments amid expectations the chancellor’s room for manoeuvre has all but been wiped out. The department will put the proposed cuts to the Office of Budget Responsibility (OBR), the official forecaster, on Wednesday ahead of the Spring Statement later this month. Sources said it was evident that “the world has changed” since the Budget last October, when the OBR indicated that Chancellor Rachel Reeves had £9.9bn in headroom against her self-imposed borrowing targets. The OBR’s forecast, which will be published alongside the Spring Statement, is likely to see that disappear because of global economic headwinds and changes to the UK’s long-term economic performance.
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