Addressing voters after Labour’s landslide election win in July 2024, Rachel Reeves vowed to put an end to “prevarication” and “chaos” and repair the public finances of an economy she claimed had been left in its worst state since the end of the second world war. 

When she stands before the House of Commons on Wednesday, the UK’s chancellor of the exchequer will be painfully aware of the gulf between those early promises of decisive action and the subsequent reality. She will also be asking voters to swallow a bitter pill: tax increases that will still leave public services underfunded, in a sluggish economy where productivity growth remains elusive. 

But Britain’s budgetary dilemmas are far from unique. Across Europe and the rich world, governments are facing brutal fiscal trade-offs as they grapple with the rising costs of ageing populations, new security threats, climate change and higher interest rates.