Overview

• The Office for Budget Responsibility presented its first pre-Budget projections to the Treasury on Friday, reflecting weaker growth and tighter public finances.
• Treasury sources expect headroom from the spring to be largely eroded, with higher debt interest and welfare policy reversals pushing the shortfall to as much as £40bn.
• Rachel Reeves remains committed to her manifesto promise not to raise income tax, national insurance or VAT, despite growing internal pressure to revisit those commitments.
• Measures under examination reportedly include applying national insurance to landlords’ rental income, imposing capital gains charges when wealthy individuals leave the UK, and limiting pension tax relief.
• Business leaders and some ministers caution that a string of minor tax tweaks—the so‑called “pasty tax” approach—would be harder to defend than a straightforward, broad-based increase.