Analysis by Capital Economics shows the rise in UK gilt yields since March has already eroded her headroom from £9.9bn to £6.7bn. Alex Kerr, at Capital Economics, says the recent about-turns on spending cuts and potential upward revisions to the OBR’s borrowing forecasts “means the Chancellor will probably need to raise between £15bn and £25bn at the autumn Budget to maintain the £9.9bn of headroom against her fiscal mandate”. He adds: “Given that she is struggling to stick to existing spending plans and we doubt the gilt market will tolerate significant increases in borrowing, she will probably have to raise taxes instead.”