Healey expected to set £15bn fiscal headroom with £5bn in tax hikes

John Healey will set his fiscal headroom at a minimum of £15bn, City analysts have predicted, although closer attention will be paid to the Chancellor’s spending restraint. Economists at major banks are anticipating Healey’s buffer against the main fiscal rule to shrink slightly. The borrowing rule states that day-to-day government spending should at least match projected tax receipts by 2030. Top economists have said the Office for Budget Responsibility, the independent forecaster whose calculations determine whether the Chancellor has a grip over public finances, will list a number of costs from higher borrowing in part due to the Iran war. At this year’s Spring Statement, former Chancellor Rachel Reeves’ buffer stood at £23.6bn, although the estimate was calculated before the US and Israel launched strikes in Iran, which led to significant trade disruption of oil and gas across the Gulf region. While higher earnings forecasts and extra income from the energy profit le