By David Milliken
LONDON (Reuters) -British finance minister Rachel Reeves said on Wednesday that she would deliver her annual budget on November 26, with a focus on keeping a "tight grip" on public spending to help lower inflation and borrowing costs.
The announcement of the budget date comes at a time of renewed financial market scrutiny on Britain, with worries about the UK's ability to keep its finances under control helping push 20- and 30-year borrowing costs to their highest level since 1998.
British inflation is also the highest in the Group of Seven advanced economies, limiting the Bank of England's scope to cut interest rates.
"Britain's economy isn't broken. But I know it's not working well enough for working people," Reeves said in a video message.
"We must bring inflation and borrowing costs down by keeping a tight grip on day-to-day spending through our non-negotiable fiscal rules," she added.
The government also wants to press on with measures to boost economic growth.
Reeves and Prime Minister Keir Starmer are struggling to meet mounting demands for spending from the already stretched public finances against a backdrop of weak economic growth and pre-election promises not to raise the rates of major taxes.
Setting out her plans for the year ahead will likely involve Reeves needing to find other ways to raise tax revenue, as she aims to balance day-to-day spending with tax revenue by 2029/30.
Reeves had just under 10 billion pounds of headroom to meet that target in March. But economists expect her to now need to tackle a roughly 20 billion-pound deficit, due to weak growth, high borrowing costs and U-turns on plans to cut welfare for the long-term sick and fuel subsidies for retired people.
In last year's budget, Reeves raised taxes by 40 billion pounds - the biggest increase in over 30 years - something she has promised not to repeat.
The new budget will come alongside a twice-yearly update of growth and borrowing forecasts from the Office for Budget Responsibility.
(Reporting by David Milliken; additional writing by Sarah Young; Editing by Kate Holton)
