Chancellor’s balancing act is highlighted by her Spring Statement
The Chancellor has a difficult task in balancing the nation’s finances and this Spring Statement was never going to provide a quick fix.
Rachel Reeves will be judged over the whole Parliament and not just this fiscal event. Mini fiscal events seldom move the dial in a meaningful way. But they can do untold damage if they are economically reckless.
A prime example of this was the Liz Truss and Kwasi Kwarteng mini-budget that plunged markets into turmoil. It showed the consequences of bypassing the checks and balances on the economy.
Stability was the order of the day as the Chancellor looked to reassure voters that the Government is on the right path.
The enormity of this statement, however, should not be lost on anyone. It set out the grim reality of the country's finances.
The welfare budget was cut with the Government expecting the measures to save £4.8bn rather than the more than £5bn in 2029/30 hoped for by ministers.
UK households will have more disposable income over the next few years, but living standards will stall as businesses pass on higher taxes through lower wages and welfare measures are cut.
In more positive news, before the Chancellor stood at the despatch box, the Office for National Statistics (ONS) revealed that the rate of Consumer Prices Index (CPI) inflation fell to 2.8 per cent in February from 3 per cent in January.
But the Chancellor will be judged on her ability to deliver growth. Ms Reeves faces an invidious situation because she needs to deliver growth but at the same time tough decisions are having to be made in the here and now such as cuts to the welfare budget.
The reality is that the levels of debt and borrowing clearly need to be reduced.