UK Treasury on course to exceed this year's deficit target by £16bn

The Resolution Foundation, an independent thinktank, warned that the £27bn of spending “headroom” set aside by former chancellor Philip Hammond in March to cope with the costs of Brexit had evaporated over the last six months, leaving the government with a hefty deficit. In a report that was due to be released ahead of Sajid Javid’s first budget on 6 November, which was scrapped last week, the independent thinktank said the Treasury was going to be left with little option but to break its rule that caps the annual shortfall in spending at 2% of GDP. “The UK’s new fiscal rules should reflect current economic realities such as record low interest rates, and the broad political consensus around the need to invest in improving productivity, tackling climate change, and renewing our public service infrastructure.”