Gov't Reaches Deal w/BMA As Chancellor Set To Deliver Statement On Finances

Chancellor of the Exchequer Rachel Reeves is set to deliver a statement to the House of Commons at the bottom of the hour regarding the condition of state finances (livestream here). Reeves is expected to announce a gap of ~GBP20bn in state finances, blaming the previous Conservative administration for fiscal mismanagement, as well as outline pauses/cuts in public spending, and set a date for the centre-left Labour party's first budget statement since 2010 (see 'UK FISCAL: Reeves to make public statement on finances today', 0720BST)

• Another part of her address is likely to confirm her acceptance of recommendations from the independent pay review bodies on increasing public sector pay awards above the rate of inflation.
• In the last few hours, the gov't and the British Medical Association have reached a deal that will see junior doctors pay increase 22% on average over two years. The BMA's members still have to vote on the offer, but with the union recommending its members accept the deal it is likely to gain approval.
• Doctors across England engaged in significant industrial action over the past 18 months, resulting in the postponement of hundreds of thoustands of appointments.
• The gov't and BMA reaching a swift deal could prove a harbinger of things to come, with sustained industrial action in healthcare, transport, and education seen under the Conservatives giving way to increased pay packages, which in turn risks a sizeable hit to already-strained gov't finances (potentially requiring tax hikes) and stoking inflationary pressures.