headroom

After 2027, financial headroom is expected to increase significantly, as capacity moves from a period of rapid growth to a more stable level, which lowers the risk profile of the investment case, he adds.

The idea is that the headroom is cash that the companies are free to use to fund expansion, raise dividends, buy back shares or for other corporate purposes that would hopefully benefit shareholders.

Ms Miller added that the "constant obsession with the headroom" was a distraction from important debates on how policy could bolster economic growth and the reform of the tax system.

However, in its last estimate in March, the OBR said the chancellor only had £10bn headroom to meet these rules, which it called a "very small margin".

But she faces difficult fiscal decisions in the run-up to her budget, after the government watered down its planned welfare savings and largely reversed winter fuel allowance cuts - decisions which narrowed her budget headroom.