A weak economy, higher borrowing costs and increased defence spending will mean tough decisions

Rachel Reeves is rapidly running out of wriggle room amid higher borrowing costs, stubborn inflation, a sluggish economy and a promise to find billions of pounds for additional defence spending.

On Tuesday, the chancellor will get the final verdict from the Office for Budget Responsibility (OBR) before her 26 March spring statement on whether her fiscal rules have been smashed apart by increasing financial pressures since last autumn’s budget.