Bond traders are reassured but the jury is still out for households and businesses

For a Labour voter who nodded off at the moment of the exit poll for last year’s general election, and woke up blinking in yesterday’s wintry sunshine 16 months later, Rachel Reeves’s budget would have kindled a warm glow.

- Heather Stewart

A mansion tax of sorts; the end of the two-child limit on benefits; more money for the NHS, and jam today for households via cheaper utility bills.

These were “Labour choices”, the chancellor said, contrasting her approach of safeguarding investment with Tory and Reform cuts, and underlining the importance of tackling unfairness, including for ludicrously skewed council tax. However, the reality of the road to this tax-and-spend Labour budget is one that has been paved with missteps and U-turns, played out against the backdrop of skittish bond markets, plunging polls and leadership plotting.

The winter fuel allowance was slashed and then restored; £5bn of welfare cuts were floated and then ditched; and a plethora of pitches were rolled in the longest budget lead-up anyone can remember.

Even yesterday morning, the choreography was wrecked by the chaos of the Office for Budget Responsibility (OBR) publishing all the details hours early - and the deputy speaker castigating Reeves for a string of blatant briefings to the press.

The impetus for Reeves's latest round of tax rises, totalling £26bn after her historic £40bn tax-raising maiden budget last year came from a summer rethink by the OBR, which has consistently overestimated the UK's productivity since the great financial crash of 2008.

As expected, Richard Hughes and his crew of number-crunchers blamed Brexit, Covid and stopgo government investment for the consistent weakness of productivity: the secret sauce of economic growth.

When the day came, this much-vaunted downgrade was actually far less significant than feared, because it was partly offset by higher than expected wages and inflation, which boosts tax revenues.