U.K. plots own DOGE amid huge global shifts
Add Axios as your preferred source to
see more of our stories on Google.
U.K. Chancellor Rachel Reeves leaves 11 Downing Street to deliver her spring statement to Parliament on Wednesday. Photo: Peter Nicholls/Getty Images
Government spending cuts, an obsession with more efficient government and an economic growth scare: Those are the dynamics on both sides of the Atlantic.
Why it matters: The U.K.'s top economic official announced deep public spending cuts to account for the huge global shifts, including a surge in borrowing costs, since the initial plans were unveiled just last fall.
- The austerity plans are evidence of governments adjusting to a world market by higher debt and borrowing costs, a turnaround from the conditions that defined the 2010s.
Driving the news: Rachel Reeves, the U.K.'s chancellor of the exchequer, announced billions in welfare spending cuts, slashing benefits for those sidelined by disability or sickness — a surprising development for a member of the Labour Party.
- Reeves also said that the government will look inward and slow the growth in day-to-day spending across departments, with a plan to trim spending by $7 billion more than previously thought in October.
What they're saying: To Americans, Reeves might sound like she took a page from the DOGE playbook.
- "In recent months, we have begun to fundamentally reform the British state, driving efficiency and productivity across government," Reeves said in a speech announcing the fiscal plans Wednesday.
Between the lines: The refurbished budget plan was necessary after a big rise in government borrowing costs that sucked up the U.K.'s headroom for spending.
- The U.K.'s surge in government bond yields was partly the result of President Trump's election, which set off a global bond sell-off in fear of his spending plans.
- The other factor was domestic: In the fall, the U.K. announced a budget with huge spending plans to jumpstart growth that spooked bond investors.
- At the beginning of October, the yield on the U.K. 10-year gilt was about 4.1%. After the yield hit almost 4.9% at the start of 2025, it is now at 4.7%.
The big picture: There is a growth scare underway in the U.K. The nation's Office for Budget Responsibility — similar to the Congressional Budget Office — slashed its expectations for U.K. growth this year in half, to 1%.
- The hope is that Reeves' investment plans — in defense, particularly — help jumpstart the economy in the long term. Economic growth down the line looked more promising.
- In the U.S., the risk of an economic slowdown from tariffs, immigration cutbacks and more could pressure the revenue side of the ledger and keep deficits high.
Reeves said the budget plans come on the back of a "world that is changing before our eyes."
- "The global economy has become more uncertain, bringing insecurity at home as trading patterns become more unstable and borrowing costs rise for many major economies."
