The UK Treasury is in contention with ministers over budget cuts affecting public services, particularly police and housing. Senior police officials warn against further financial reductions as the IMF advises Chancellor Rachel Reeves to adjust fiscal rules for more leeway in spending. Although some departments are still finalizing budgets, government sources emphasize no intentions to alter existing fiscal guidelines due to high borrowing levels. Reeves has somewhat modified the fiscal approach, allowing increased borrowing for capital projects, which amounts to £113 billion, yet reassurances remain that further drastic changes are unlikely.
A number of key departments are yet to agree their budgets with the Treasury, including the Home Office, the Department for Food and Rural Affairs.
The IMF suggested... the chancellor should examine ways to avoid having to make short-term savings when there is a downturn in economic forecasts.
One government source said there were clear costs to any further changes to the rules, evidenced in the market's reaction to changes to the borrowing rules at the last budget.
Reeves has tweaked the rules already to allow more borrowing for capital investment expected to equal 113bn.
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