Reeves prepares for tax rises in Budget as global and domestic pressures bite
UK set for tax rises as Rachel Reeves says everyone ‘must do their bit’
- Rachel Reeves, the Chancellor, signalled that tax rises are forthcoming in her Budget, stating that "each of us must do our bit" to contribute.
- She refrained from recommitting to Labour's manifesto pledges not to increase income tax, national insurance, or VAT, implying these could be subject to change.
- Reeves cited global problems, including a tariff war triggered by US President Donald Trump, and domestic issues like an anticipated downgrade in economic productivity by the OBR, as reasons for the necessary "hard choices."
- The Chancellor delivered an unusual pre-Budget speech to prepare the public for expected tax increases, stressing the importance of protecting families, public services, and controlling national debt.
- Economists estimate billions are required to address fiscal challenges, and the announcement prompted varied reactions in financial markets, with gilt yields initially falling but sterling and the FTSE 100 also dropping.