If sustained, the recent increases in gilt yields would reduce Reeves’ headroom from £9.9bn as of the Spring Statement to £5.3bn, according to Alex Kerr, an economist at Capital Economics. Increased debt servicing costs, combined with potential downgrades to growth forecasts by the Office for Budget Responsibility, might force the chancellor to raise as much as £27bn in her Budget to close the hole in the public finances, he added.