Overview

• Britain’s fiscal watchdog has signalled a shortfall that could reach about £30bn, while Oxford Economics estimates Reeves must set out £20bn–£30bn of tightening in November.
• NIESR modelling finds a VAT increase would cut GDP by about 0.9% in the first year and lift inflation, corporation tax would depress investment over time, and an income tax rise would trim GDP by roughly 0.05%.
• Rising gilt yields are pushing up borrowing costs, with Oxford Economics estimating the increase adds around £4bn to projected spending.
• Recent welfare reversals carry an estimated £6bn cost that officials expect to offset with cuts, and tax receipts undershot OBR expectations by £6.4bn between April and August.
• Investors including Pimco and BlackRock have called for a larger fiscal buffer, and raising headroom from £9.9bn toward £15bn could push the near‑term consolidation closer to £30bn, with options such as threshold freezes (£10bn) and a bank windfall tax (£5bn) under discussion.