Chancellor Philip Hammond is set to move away from the rigid targets his predecessor George Osborne introduced as he lines up his inaugural Autumn Statement later this month.
The Financial Times cites officials close to cabinet discussions, who say that Hammond is eyeing up a flexible fiscal framework to give the government “headroom” to respond to Brexit.
While cabinet colleagues were apparently told to only expect a modest spending package in a briefing yesterday, the new plan could allow for greater stimulus whilst still balancing the budget in the next Parliament.
One source told the paper: “The goal is to create some headroom so it can be deployed if necessary. The chancellor made it clear we face an unprecedented level of uncertainty.”
Osborne’s goal of running a surplus by 2019/20 has already been ditched by the government.
Hammond is also understood to have played down the possibility of radical reform in the Autumn Statement, which will be delivered on 23 November, where speaking to colleagues.
A Conservative MP briefed by Hammond quoted by the paper says: “He has told us that now isn’t the time for lots of small changes. This is a time for consistency, preparation and steadfastness.”
A spokeswoman for Prime Minister Theresa May says the Autumn Statement build-up showed “the Prime Minister’s approach to collective government and having more of these discussions early on.”