Overview

• Rachel Reeves acknowledged she is weighing both tax rises and spending cuts for the 26 November Budget and said higher taxes on the wealthy will be "part of the story."
• The Institute for Fiscal Studies estimates around £22bn is needed to restore last year’s headroom and argues for significantly more buffer to avoid a recurring "fiscal Groundhog Day," a view echoed in joint work with Barclays.
• IFS options to find savings include revisiting welfare, such as the pensions triple lock, health-related and disability benefits, and special educational needs spending, though ministers previously reversed planned welfare cuts after a backbench revolt.
• Barclays analysts warn gilt investors will reward only credible, deliverable measures, cautioning that relying solely on tax hikes could force breaking manifesto pledges and that raising VAT risks stoking inflation.
• Fresh analysis from Rathbones says a recurring wealth tax could drive at least £100bn of assets abroad and be costly to administer, while Reeves has dismissed fears of an exodus and has previously ruled out a standalone wealth tax.