The Chancellor, John Healey, has ordered cabinet colleagues to find further savings ahead of tomorrow's Budget, according to the Times, as relayed by The Spectator.
Ministers have reportedly been told to pay for any new priorities by cancelling, cutting or reprioritising existing policies rather than asking the Treasury for more money. The Spectator says Healey describes the backdrop as an "economic storm".
The Spectator says the war in Iran has pushed up energy prices, inflation and borrowing costs. It adds that while various efficiencies have already been found, the planned increase in defence spending "may require further cuts".
Indexbox separately reports that Healey told cabinet to keep strict control of departmental budgets.
The Treasury has not confirmed the reports. We will check them against the statement when Healey delivers it to the Commons on Wednesday 28 October.