Reeves says economic damage caused by Brexit forcing her to take action in budget

"We know the OBR I think are going to be pretty frank about this [will say] that things like austerity, the cuts to capital spending, and Brexit have had a bigger impact on our economy than was even projected back then. That is why we are unashamedly rebuilding our relations with the EU to reduce some of those costs that in my view were needlessly added to businesses since 2016 and since we formally left a few years ago."

"Reeves is widely expected to announce a package of tax increases and cuts to spending at the budget on 26 November. She is facing a shortfall against her self-imposed fiscal rules that require day-to-day spending to be balanced by revenues within five-year's time. The Treasury watchdog is believed to be preparing to sharply downgrade its forecasts for the productivity growth of the British economy, alongside taking into account rising borrowing costs and the financial cost of Labour's high-stakes welfare U-turns."

The government blames Brexit and austerity for heavier-than-expected damage to the British economy, including cuts to capital spending that reduced growth. The Office for Budget Responsibility is expected to sharply downgrade productivity and growth forecasts, taking into account rising borrowing costs and recent welfare policy reversals. A package of tax increases and spending cuts is anticipated at the 26 November autumn budget to plug a shortfall against fiscal rules requiring day-to-day spending to balance with revenues within five years. The government plans to rebuild relations with the EU to reduce costs imposed on businesses since 2016.

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