Economics viewpoint Reeves must not waste her chance to 'go big'

It's back to school this week for MPs and government ministers - and few can be facing a more challenging new term than Rachel Reeves.

- Heather Stewart

It's back to school this week for MPs and government ministers - and few can be facing a more challenging new term than Rachel Reeves. After being moved to tears in the unforgiving glare of the cameras before the summer break, the chancellor's allies say she is returning to the frontline with a renewed sense of purpose. She is ready, as the kids would say, to "lock in".

But team Reeves is also well aware of the scale of the economic and political obstacles that she is facing. Most pressing, yet out of the chancellor's hands, is the Office for Budget Responsibility's summer "supply stocktake" of its economic model.

As the Guardian reported in June, it looks likely that the OBR will move its key productivity forecast closer to the less-positive consensus. Given the crucial importance of productivity in determining economic growth, this shift could create a £20bn headache for the Treasury.

The downgrade - rather than anything Labour has actually done - is likely to be the biggest factor pushing Reeves off track from her fiscal rules. That creates a formidable challenge in explaining what has gone awry - and why she needs to come back with more tax increases, after last year's historic £40bn budget package.