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 today.

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."

It's not just sentiment surveys. There is new evidence that businesses may be acting on worries that the volatile policy environment could crimp future activity.

Driving the news: Durable goods orders increased 0.9% overall in February, the Census Bureau said this morning. But the line of the report that analysts turn to for a sense of business investment activity unexpectedly fell.

• New orders for nondefense capital goods excluding aircraft — core capital goods — fell 0.3% in February. Analysts had expected the forward-looking indicator of how much equipment businesses are buying to rise 0.2%.
• Shipments of core capital goods, meanwhile, rose 0.9%, potentially reflecting businesses looking to get ahead of looming tariffs.

Reality check: This is a volatile data series, and its drop doesn't necessarily mean broader economic deterioration is on the way.

• It was in negative territory in five separate months of 2024, which didn't translate into a recession.

Yes, but: Let's put it this way. If the prospect of trade wars and federal spending cuts were going to make businesses more reluctant to invest in new equipment, new orders for capital equipment are one of the first places it would show up in hard data.

• And February's number fit that narrative.