Chancellor Rachel Reeves has refused to rule out tax increases ahead of her first Budget later this month, saying she will make the necessary choices to steer the UK economy through a difficult period.
Speaking in London on Monday, Reeves said her 26 November Budget would focus on growth and fairness, while acknowledging that the global economy has presented fresh challenges over the past year.
Her comments have fuelled expectations that tax rises are imminent, despite Labour’s manifesto pledges not to raise income tax, VAT or National Insurance.
Analysts believe Reeves could be forced into tough fiscal decisions after the Office for Budget Responsibility (OBR) is expected to downgrade productivity forecasts, leaving a £20bn gap in public finances.
While she avoided confirming which taxes could rise, Reeves insisted the Budget would prioritise fiscal discipline and rebuilding economic resilience. She also hinted at the need for lower interest rates, noting that despite five recent cuts, borrowing costs remain “a constraint on business and a burden on families.”
The Chancellor said her goal was to “create the conditions for rate cuts to support growth and ease the cost of living,” signalling a coordinated effort between government policy and the Bank of England’s inflation strategy.
Opposition leader Kemi Badenoch dismissed Reeves’ remarks as a laundry list of excuses, accusing Labour of lacking a credible plan to get Britain working.
The Liberal Democrats meanwhile warned that the coming Budget will be a bitter pill to swallow for taxpayers.
