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1h ago

Reeves Finalizes Tax-Raising Budget as UK Economy Softens

Fresh PMI and ONS figures show faltering activity, sharpening pressure to plug a £20–30bn gap without raising the main income tax rate.

A view of HSBC building in Canary Wharf financial district in London, Britain, August 1, 2023. REUTERS/Susannah Ireland/File Photo
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Rachel Reeves is about to face her most important moment in her political career

Overview

  • The chancellor will deliver the Autumn Budget on November 26, with market and analyst expectations pointing to £20–30bn in new revenue measures.
  • S&P Global’s flash PMI signaled near-stagnation as companies paused decisions, October retail sales fell, and GfK confidence slipped to -19.
  • ONS data showed borrowing running higher than forecast, adding to the fiscal squeeze Reeves needs to address.
  • With a basic-rate income tax hike seen as unlikely, reporting indicates options such as freezing thresholds, reworking council and property taxes, and possible pension or ISA changes.
  • Process tensions grew as Mel Stride asked the OBR to confirm no post–Oct. 31 forecast changes beyond Treasury-scored measures, while Reeves publicly pushed back at critics ahead of the statement.