Rachel Reeves has dismissed claims of a £50 billion deficit in the public finances, which come amid increasing borrowing costs and anticipated tax hikes as the chancellor prepares for the autumn Budget. In an interview with the BBC, Reeves criticized speculative reports about her financial plans, asserting that many of them are unfounded.
Recent data revealed that long-term government borrowing has reached its highest level in 27 years, raising concerns that the government may need to either increase taxes or reduce spending. The chancellor has indicated that he does not view the £50 billion figure as accurate, suggesting the forecasting organization, the National Institute of Economic and Social Research (NIESR), has miscalculated other figures in the past. NIESR has not commented on this claim.
Reeves stated her objective is to “get the balance right” in the upcoming Budget, scheduled for November 26. She emphasized the importance of stimulating economic growth and investment, maintaining that the government is committed to funding public services while fostering a conducive environment for businesses. However, Shadow Chancellor Mel Stride has accused the current administration of lacking a coherent plan with respect to the Budget.
Amid discussions about potential tax increases—targeting properties, banks, and individuals—Reeves refuted these claims, insisting that premature assertions about the Budget’s contents are misleading. She outlined her two non-negotiable rules regarding government borrowing, which include covering day-to-day government costs without resorting to borrowing by 2029-30 and reducing debt as a share of national income within the same timeframe.
As concerns persist regarding rising global borrowing costs influenced by political instability and changes in pension fund strategies, some analysts speculate that the UK’s financial situation could necessitate support from the International Monetary Fund. However, Reeves believes that reputable economists do not support this view, asserting that there are positive signs within the economy, even as efforts towards equitable growth remain a priority.
Source: https://www.bbc.com/news/articles/cx27nm2mn5po?at_medium=RSS&at_campaign=rss