British Finance Minister Rachel Reeves on Wednesday is set to detail billions of pounds in spending reductions in her Spring Statement to address the country’s ailing public finances.

The spending update comes as the Labour government, elected in July following a landslide election win, faces sluggish economic growth and rising borrowing costs.

According to the Office for National Statistics, in a glimmer of good news, Britain’s annual inflation rate eased to 2.8 percent in February, down from 3.0 percent in January.

However, despite the slowdown, inflation remains elevated above the Bank of England’s two percent target.

The central bank reportedly kept interest rates unchanged last week after a series of hikes, warning of economic uncertainty.

Reeves has warned that since her inaugural budget in October, “the world has changed.”

Heightened global uncertainty over US tariffs and the war in Ukraine have added to the UK’s economic woes, chipping away at the Labour government’s £9.9 billion ($12.8 billion) fiscal cushion.

Prime Minister Keir Starmer has recently pledged to hike spending on defence, with the government announcing late Tuesday a £2.2 billion boost next year.

“This moment demands an active government stepping up to secure Britain’s future,” Reeves said in a press statement ahead of the fiscal update.

An advocate of iron discipline over public finances, Reeves is set to detail cuts to welfare payments and government departmental budgets in Wednesday’s highly anticipated update.