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24m ago

Reeves Puts Income Tax Rise to the OBR for Budget Assessment

The step would build fiscal headroom after weaker forecasts, meeting calls for a temporary, pro-growth package.

Britain's Chancellor of the Exchequer Rachel Reeves takes journalists' questions after delivering a speech in the media briefing room of 9 Downing Street, central London, on November 4, 2025, ahead of the forthcoming Budget. JUSTIN TALLIS/Pool via REUTERS/File Photo
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Overview

  • The Times reports the chancellor has notified the budget watchdog that an increase in personal taxation is under consideration for November 26, with options including a 2p income tax rise paired with a 2p cut in national insurance and a further freeze to thresholds.
  • The Office for Budget Responsibility will score the package, and Reeves could still change course before the final pre‑Budget forecast is returned to the Treasury.
  • The CBI urged her to create larger fiscal headroom, estimated by forecasters at roughly £30 billion, and to avoid further hikes on businesses already facing a 25‑year high tax burden.
  • The Tony Blair Institute advised that any manifesto‑breaching rises should be explicitly temporary and accompanied by pro‑enterprise reforms, with targeted tax cuts once growth and service reforms take hold.
  • Entrepreneur surveys show acute concern over higher taxes, with most founders expecting increases and many citing plans to relocate, as the Bank of England flags that Budget uncertainty is already weighing on investment and spending.