The Institute for Fiscal Studies think tank said Friday there is a “knife edge,” chance of the U.K. achieving the latter fiscal rule, but that Finance Minister Rachel Reeves could “get lucky.”

She otherwise faces an “unenviable set of options,” said IFS Associate Director Ben Zaranko, including bringing forward upcoming changes to how debt is calculated to free up more headroom; paring back current spending plans; announcing more tax rises, which could be conditional on changes within the coming years; or doing nothing and breaking her rule.

Economists Ruth Gregory and Hubert de Barochez at research group Capital Economics also said U.K. gilts may be trapped in a “vicious circle,” in which “the rise in U.K. yields puts a strain on public finances, therefore calling for an even bigger tightening of fiscal policy, but in turn putting additional strain on the economy.”

Bank of America Global Research strategists said Friday that it was unlikely Labour would breach its rules, and would instead announce further fiscal consolidation — measures to reduce public debt, generally public spending cuts or tax hikes — in the spring or earlier.

That would potentially be through spending cuts, they added, coming off the back of the £40 billion in tax hikes that Labour announced in October.

CNBC has contacted the Treasury for comment.

Labour should have gone for a broader range of tax rises rather than focusing on a hike in National Insurance which has been slammed by the U.K. business community, Cable said. However, he added that the market has broader concerns over U.K. growth and the global economic picture, which is clouded by external factors such as the weaker Chinese outlook.

Cable also downplayed comparisons with the U.K. mini-budget crisis in 2022, when then-Prime Minister Liz Truss’s announcement of sweeping tax cuts triggered massive volatility in the bond market.

“The Truss moment was a prime minister just taking a reckless leap into the dark with a big increase in the budget deficit on the assumption this will somehow trigger economic growth. Well, that clearly isn’t what’s happened this time. The argument is about whether they’ve done enough tightening and whether they’ve done it in the right way, but it’s a different kind of problem,” Cable told CNBC.

That sentiment was broadly reflected in wider analysis. Bank of America strategists called comparisons with the mini-budget “overblown,” noting that the bar for the Bank of England to intervene in the gilt market, as it did at the time, was high.

Capital Economics said last week’s higher gilt yields were an economic headwind but not a crisis, with smaller and slower moves than after the mini-budget; while David Brooks, head of policy at consultancy Broadstone, said there did not appear to be any “systemic issues at play” in the liability-driven investment (LDI) funds which were the biggest concern back in 2022.