The Chancellor, John Healey, says he wants the Budget on Wednesday 28 October to give households and firms "a bit of breathing space" while keeping to the government's fiscal rules.
"I want the budget to be a budget that gives a bit of breathing space but also reinforces the strength of our fiscal plans"
Speaking to reporters at the IMF meetings on Thursday 15 October, he said he had "said from day one and week one" that he would stick to the rules, and that he had Andy Burnham, the Prime Minister, "in lockstep alongside me". He added: "I will meet those fiscal rules." Reuters reports he also said he intends to "stay the path" on deficit reduction.
A Reuters poll of economists the same day put the median headroom against the rules at around £10bn to £12bn. That is down from £23.6bn at the March fiscal update. Some forecasters put it as low as £5bn because of uncertainty over how the OBR will score the factors involved. These are economists' estimates, not an official figure.
The economists polled said Mr Healey should rebuild headroom to about £15bn to £16bn to keep bond investors onside. They expect modest cost-of-living measures, offset by rises in some of the smaller taxes.
Reuters also reports that UK government borrowing costs hit their highest level since 1998 in the week before he spoke, and are higher than in any other major advanced economy.