Overview
- The Office for Budget Responsibility’s productivity downgrade has added about £20bn to the expected shortfall ahead of the 26 November Budget, increasing pressure on the Chancellor’s limited headroom.
- Rachel Reeves said in Riyadh that both tax rises and spending cuts are being examined and reiterated she will not breach the government’s fiscal rules.
- Reported options under consideration include an annual 1% levy on the value of homes above £2m and possible changes to the 45p income tax rate or its threshold, though no decisions have been confirmed.
- The Institute for Fiscal Studies and other economists caution that piecemeal levies could do more harm than transparent moves on major taxes or spending, and Mervyn King criticised a mansion tax as lacking a coherent strategy.
- Alongside budget work, Reeves pursued growth plans in Saudi Arabia, expressing confidence in a GCC trade deal and announcing a £6.4bn two‑way trade and investment package.