Chancellor Rachel Reeves has refused to rule out a full emergency Budget in March after a bond market sell-off has hammered her spending plans.
Reeves on Tuesday refused to rule out tax rises and spending cuts when quizzed in Parliament.
Instead, she doubled down on commitments to borrowing rules in October’s Autumn Budget.
“We have committed to just one budget per year to provide businesses with the certainty that they need to invest, so we will have an update from the OBR in March,” she said when asked if she could rule out cuts.
“We have set out the fiscal rules that we will balance day-to-day spending with tax receipts and we will get debt down as a share of gross domestic product within the forecast period.
“We will continue at all times to meet those fiscal rules.”
Reeves was speaking in her first Commons appearance since last week saw the bond market sell-off steepen, sending gilt yields surging.
The rise in government borrowing costs has threatened to remove Reeves’ fiscal headroom following spending commitments made during the last Budget.
Bond yields inched upwards after Reeves' appearance on Tuesday, wiping off declines seen earlier, with rates on 30-year gilts moving one basis point higher to 5.44%.
“Aside from defending her position as Chancellor and promising to boost economic growth, she has not produced any concrete measures on how she will stabilize the UK’s finances,” XTB analyst Kathleen Brooks commented.
“In fairness, no one expected her to list spending cuts, but financial markets may not give Reeves a long reprieve.”