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2h ago

KPMG Sees Tax Rises in Autumn Budget as UK Outlook Weakens

The consultancy says the chancellor is likely to raise revenue rather than cut services to deal with a growing funding gap.

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Overview

  • KPMG’s UK Economic Outlook projects GDP growth of 1.2% in 2025 and 1.1% in 2026, reflecting cautious consumers and soft business investment.
  • The firm expects unemployment to edge up toward 4.9% by 2026 as hiring slows and vacancies continue to decline.
  • Inflation is forecast to stay above the Bank of England’s 2% target into late 2026, with a single rate cut expected this year and further reductions to about 3.25% by end-2026.
  • Mounting pressures from health and defence spending, reversals of planned welfare and winter fuel cuts, and higher debt costs underpin KPMG’s call for higher taxes.
  • KPMG says tax revenues are likely to ratchet up over the next decade, with some reports putting the current budget gap at £20–£50 billion.