Reeves Faces Smaller Fiscal Gap Than Feared, Think Tank Says

The budget hole UK Chancellor of the Exchequer Rachel Reeves has to fill will be smaller than widely feared, according to the Resolution Foundation, which said that unexpectedly strong pay growth has offset an anticipated productivity downgrade.

In a pre-budget analysis published on Tuesday, the think tank put the fiscal deterioration since March at around £14 billion ($18.4 billion), far below the estimates of most private-sector forecasters. More than half of 20 economists surveyed by Bloomberg calculate the slippage at between £25 billion and £40 billion.