UMVA has learned that Chancellor Rachel Reeves is facing a significant squeeze on her fiscal plans due to a surge in gilt yields and a hefty £10.3bn debt servicing bill.
This development has drastically reduced the government's fiscal headroom, leaving Reeves with extremely limited room for maneuver ahead of the autumn Budget.
The constrained fiscal environment is expected to have far-reaching implications, with small and medium-sized enterprises (SMEs) bracing themselves for the consequences.
Higher gilt yields have dealt a blow to the Chancellor's plans, effectively erasing any remaining fiscal flexibility and heightening concerns about the government's ability to respond to future economic shocks.
