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5h ago

Reeves Confirms Tax and Spending Moves Under Consideration for 26 November Budget

A downgrade in productivity forecasts has widened the public finance gap, pushing the chancellor toward targeted tax measures.

British Chancellor of the Exchequer Rachel Reeves visits the Sipsmith distillery in Chiswick, London, Britain October 9, 2025. Paul Grover/Pool via REUTERS/File Photo
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British Chancellor of the Exchequer Rachel Reeves attends the annual Mansion House dinner in London, Britain, July 15, 2025. REUTERS/Isabel Infantes/File Photo

Overview

  • Rachel Reeves said she is considering both tax rises and spending cuts as she finalizes her 26 November Budget.
  • She indicated higher taxes on the wealthy will be part of the plan, while Labour maintains its pledge not to raise VAT, income tax or national insurance.
  • Independent estimates put the fiscal shortfall at roughly £20–30bn, with some economists warning it could be closer to £50bn over the coming years.
  • Reeves cited austerity, Brexit and the 2022 mini‑budget for weighing on growth, and noted the OBR has previously overestimated UK productivity.
  • The IMF expects UK inflation to be the highest in the G7 in 2025 and 2026, as the chancellor attends IMF and World Bank meetings in Washington and business groups urge her not to increase levies on firms.