Overview
- Rachel Reeves declined to recommit to Labour’s manifesto promise on income tax, National Insurance or VAT, saying everyone will have to contribute.
- Economists put the fiscal shortfall at roughly £22 billion, with an expected OBR productivity downgrade set to tighten the Chancellor’s headroom.
- One reported option is a Resolution Foundation proposal to raise income tax by 2p while cutting employee National Insurance by 2p, framed as a switch to spread the burden.
- Raising council tax on the highest property bands is under discussion, with the IFS estimating about £4.2 billion in revenue and critics warning of hits to pensioners and high‑value regions.
- Financial markets weakened after the speech, with sterling falling and the FTSE dipping, as opposition figures warned of political consequences and pressed for resignations if pledges are broken.