Chancellor Rachel Reeves is scheduled to present the government’s Budget on November 26, outlining plans for the economy. There are indications that she may need to increase taxes or reduce spending to adhere to established borrowing rules. Prior to the 2024 general election, the Labour Party committed not to raise income tax, National Insurance, or VAT for working individuals.
During her Budget address, Reeves will detail proposed changes to tax rates and significant decisions regarding allocation in areas such as health and education. The statement will be delivered to Members of Parliament (MPs) in the House of Commons and will coincide with additional disclosures from the Treasury, which manages economic and financial matters. The independent Office for Budget Responsibility (OBR) will also provide an assessment of the UK’s economic state and future projections.
The speech typically begins at approximately 12:30 PM UK time and lasts about an hour, with live broadcasts available on the BBC iPlayer and BBC News website. Following the presentation, the Leader of the Opposition, Kemi Badenoch, will respond, and MPs will debate the proposed measures for four days before voting on them.
Speculation regarding the Budget suggests potential tax increases, particularly since Reeves is expected to generate additional revenue to comply with her fiscal guidelines, which include not borrowing for daily spending and ensuring government debt decreases as a share of national income. The OBR’s recent forecasts indicated that Reeves has only a limited fiscal margin of £10 billion.
Options for raising revenue without directly increasing certain taxes may involve extending the freeze on tax thresholds or reforming property taxes. There are also discussions about possible adjustments to Individual Savings Accounts and pensions, but definitive changes remain uncertain. The Trades Union Congress has advocated for higher taxation on sectors like online gaming and bank profits.
In terms of economic performance, the latest data indicates a growth of 0.3% between April and June, while inflation remains above preferred levels. In response to these economic conditions, the Bank of England recently lowered its key interest rate to 4%, citing concerns about a weakening job market.
Source: https://www.bbc.com/news/articles/cj4w44w42j5o?at_medium=RSS&at_campaign=rss