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Whitehall braced for spending cuts after UK hit by bond market turmoil

Rising gilt yields mean government departments may face further squeeze
The Treasury has signalled that, if necessary, it will reduce expenditure rather than increase taxes

Whitehall departments are bracing for harsher spending settlements this summer as the Treasury seeks savings following a jump in its borrowing costs. 

Officials warned of “really difficult choices” in the upcoming spending review — with some departments warning it will be tough to withstand tighter spending given cuts in recent years. 

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