Overview

• The National Institute of Economic and Social Research forecasts a £41.2 billion shortfall on the stability rule by 2029-30 and a total £51 billion funding gap once a £9.9 billion buffer is restored.
• Weaker growth projections, unpassed welfare reforms and a U-turn on winter fuel payments have added around £15.2 billion to public spending since the spring statement.
• Forecasters say plugging the gap will require raising income tax, VAT or employee national insurance or implementing substantial spending cuts in the autumn budget.
• City analysts estimate a narrower £20–25 billion hole but agree that at least one main tax rate must rise to meet fiscal targets.
• Prime Minister Sir Keir Starmer has declined to rule out tax hikes on working people, intensifying pressure on Reeves to break her manifesto promise.