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Budgets are all about numbers.

Over the next 24 hours, we will be grappling with all sorts of figures about the state of the economy, the size of the budget deficit, the fiscal rules the new chancellor plans to introduce in the coming months.

But in fact, most budgets, including this one, can be boiled down to the difference between two big numbers: total government spending and total government revenues.

Currently the UK government spends just over £1.2 trillion a year and generates just over £1.1 trillion from taxes and receipts.

In other words, this country spends more than it produces from tax revenues. So he has to borrow the difference.

This borrowing, also known as the deficit, is (as you’ve probably calculated from the figures above) around £100bn a year.

Politicians, including the Chancellor, spend a lot of time worrying about the budget deficit.

The chancellor’s noble goal will not come cheap

Indeed, the main purpose of the different fiscal rules they have imposed on themselves in recent years was to narrow the gap between these two big figures.

Generally speaking, the easiest way to do this is to cut government investment, something that few people realize in the short term.

When he took office in 2010, George Osborne cut the bulk of public spending, but he certainly cut capital expenditure, the amount the public sector spends on buildings, infrastructure and machinery.

Jeremy Hunt, who briefly raised the total after the pandemic, was planning a similar decline in investment in the coming years.

Rachel Reeves has repeatedly said ahead of the budget that she plans to invest much more in the coming years.

This is a noble goal, given that investment tends to benefit future generations, but it will not be cheap in the short term.

Will jiggery-pokery scare the markets?

In fact, keeping investment spending at current levels will cost around £30bn a year by the end of this decade.

So how does the chancellor reconcile this with his fiscal rules?

Part of the answer is that it plans to increase revenues to the exchequer through higher national insurance charges for insurers.

But the other part of the answer is that it is also changing its financial rules.

Long story short, it seems likely that Ms. Reeves will choose a set of fiscal rules that ignore investment spending.

Both the updated debt rule and the current budget rule essentially exclude capital expenditures, although debt includes interest costs, so it cannot borrow willy-nilly.

This may sound like a financial ploy, and some in the market worry that investors will soon get scared as a result.

Indeed, some argue it already is, pointing out that the cost of government borrowing, as measured by the UK’s 10-year bond yield, has risen from below 4% to almost 4.3% in the past month alone.

Expect surprises

But this is a slight misreading of this market, which is influenced by global economic factors and central bank actions as well as the UK’s budget policy.

In fact, compare recent changes in the UK’s borrowing rates to those in Germany, and US and UK government bond yields are close to where they usually trade in the run-up to the budget.

And they’re a long way from where they were on the road to Liz Truss’s mini-budget.

Even so, this financial event is bound to have a few unexpected surprises and some relevant new data points.

After all, it’s a budget.