Overview

• Treasury officials have drawn up a menu of potential tax increases, including abolishing the £500 dividend allowance and raising the bank profits surcharge.
• Ministers are weighing these measures to close a forecasted fiscal gap of up to £30 billion after earlier tax rises fell short.
• Official data show the UK economy contracted by 0.3% in April, undermining the growth outlook that underpins spending plans.
• Chancellor Rachel Reeves has declined to rule out further levies and will base final decisions on updated Office for Budget Responsibility forecasts.
• The Institute for Fiscal Studies warns that additional tax rises now look almost inevitable given weaker growth and surging debt interest costs.