Third, even if it weren't for the OBR's productivity downgrade, it's quite likely the chancellor would have broken those fiscal rules, due to the various U-turns by the government on welfare reforms, winter fuel, and extra giveaways they haven't yet provided the funding for, such as reversing the two-child benefit cap.

Rachel Reeves is considering bolder and more progressive tax changes at her upcoming UK budget than some investors and Labour lawmakers are expecting, as she seeks to head off criticisms that she is only tinkering with Britain’s economy.

A downgrade to the UK's productivity performance from the government's official forecaster could lead to the chancellor facing a £20bn gap in meeting her tax and spending rules, the BBC understands. Rachel Reeves has confirmed both tax rises and spending cuts are options in next month's Budget.

The pound weakened against major currencies as concerns over the UK's fiscal situation loom large. With a budget announcement and a Bank of England meeting approaching, financial markets are tense. The Office for Budget Responsibility is expected to lower productivity forecasts,

(Reuters) -Britain's Office for Budget Responsibility is expected to cut its trend productivity growth forecast by about 0.3 percentage points, the Financial Times reported on Monday, citing people familiar with the matter. Reuters could not immediately confirm the report.