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4h ago

Reeves Confirms Tax Rises and Spending Cuts on the Table for 26 November Budget

An expected OBR productivity downgrade has widened the fiscal gap, forcing choices that test Labour’s tax pledges.

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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Overview

  • Rachel Reeves told Sky News she is considering both higher taxes and lower spending, her first public confirmation ahead of the Budget.
  • Independent forecasts suggest a shortfall ranging from roughly £30bn to as much as £50bn, driven by weaker growth and dropped welfare savings.
  • The IMF now expects UK inflation to be the highest in the G7 in 2025 and 2026, even as it nudged this year’s growth outlook higher.
  • Tax specialists urged raising a major levy or broadening bases, such as VAT, rather than multiple small measures that add complexity.
  • Business groups warned against new burdens on firms, while Reeves cited austerity, Brexit and the 2022 mini‑budget as factors weighing on productivity and the public finances.