Growth downgrades and the rise in bond yields in recent months have wiped out the £9.9 billion margin that Reeves left in her Budget in October against her “stability rule” that day-to-day spending must be covered by taxes.

US economists are looking for monthly headline CPI at 0.31%, which would keep the year-on-year rate at 2.9%. Core CPI is forecast to come in at 0.28%, with the year-on-year rate ticking down a tenth to 3.1%.

The biggest risers on the FTSE 100 were Prudential, up 39.4p to 722p, Entain, up 36p to 696p, Barratt Redrow, up 23.1p to 460.1p, Croda, up 81p to 3131p, and Kingfisher, up 6.3p to 252.8p.

He added he will announce reciprocal tariffs this week on countries that tax imports from the US. Trump said those will be imposed “almost immediately” after the announcement, without providing further detail.

The FTSE 100 has started the year with a bang, hitting its second all-time high of 2025 on Thursday morning, surging past 8,700 points at the open. It had broken its previous record high just last month,