Economists polled by Reuters expect the Chancellor, John Healey, to aim for a buffer of around £15bn against the fiscal rules in the Budget on Wednesday 28 October. That would not restore the £23.6bn of headroom he had at the March fiscal update.
The poll of 19 economists from large banks and consultancies, published on 15 October, says he should rebuild headroom to about £15bn to £16bn. Reuters notes that £15bn would be equivalent to just 0.5% of economic output, which it describes as thin by historic standards.
"We expect the Chancellor to target fiscal buffer of (around) £15 billion rather than restore the March level"
That was Anna Titareva, an economist at UBS Investment Bank.
Rob Wood, chief UK economist at Pantheon Macroeconomics, told Reuters that markets can probably tolerate modestly lower headroom in the short term but that such a plan would lack credibility. He sees the risks to gilt yields as weighted towards them rising.
The poll's median estimate puts current headroom at around £10bn to £12bn, with some respondents putting it as low as £5bn. These are forecasters' estimates. The official figure will come from the OBR on Budget day.