Alex Kerr, UK economist at the consultancy Capital Economics, said: “Against a backdrop of slowing GDP growth and high interest rates, December’s overshoot in borrowing is further disappointing news for the chancellor.” Kerr noted that elevated gilt yields would further reduce Reeves’s headroom against her fiscal rules, adding: “That combined with a weakening economy suggests that, in order to meet her fiscal rules, the chancellor may need to raise taxes and/or cut spending in the next fiscal statement on March 26.”