Rachel Reeves has promised a Budget ‘for the strivers’ but admitted tough decisions have been made in a new article.
Ahead of Labour’s long-anticipated Budget on October 30, the Chancellor said: “I have had to make tough decisions in this Budget. Not everything is going to be easy. But let me be clear – I am doing this for hardworking families up and down the country who have been crying out for change”.
Labour had promised at the general election not to increase taxes on “working people” – but have been struggling to define who these people are ahead of its tax-raising Budget.
Ms Reeves has also compared her mission in this week’s Budget to that of the reforming agendas of Clement Attlee and Harold Wilson. In an interview with The Observer, she promised “we can do great things as a country again” as she outlined a new era of public and private sector investment in hospitals, schools, transport and infrastructure.
We’ll be bringing you all the latest updates ahead of the big event here, on The Independent’s liveblog.
Key Points
What is expected in next week’s Budget?
Rachel Reeves: Budget is ‘not going to be easy’
Education secretary ‘can’t speculate’ how long ‘working people’ pledge will last
New era of investment in hospitals, schools and transport to be announced in Budget
New era of investment in hospitals, schools and transport to be announced in Budget
09:25 , Holly Bancroft
Rachel Reeves has said that she will launch a new era of public and private investment in hospitals, schools, transport and energy in her Budget.
In an interview with The Observer, Ms Reeves has said that Labour will change the fiscal rules to allow for £50bn of extra borrowing for capital projects.
£1.4bn has already been pledged to rebuild crumbling schools, but further measures for hospitals are expected to be announced.
She told the paper: “We inherited a plan from the previous government in which public sector net investment, capital investment, would be falling sharply over the course of this parliament, and that would mean scores of hospitals not built. It would mean massive opportunities to grow our economy in the digital and energy sector would be missed and those jobs would go elsewhere.”
UK’s ‘best days are ahead of us’ minister says
09:10 , Kate Devlin
Bridget Phillipson said the UK’s “best days are ahead of us” as she promised the Budget would seek to “invest in the long-term prosperity of our country”.
The Education secretary told Sky News’s Sunday Morning With Trevor Phillips programme: “We face some tough choices but we need to restore stability back to the economy.”
She added: “But the choice of this Budget is, ‘do we invest in the long-term prosperity of our country, or do we accept we’re on a path to decline?’
“I think our best days as a country are ahead of us, and this Budget will fix those foundations so that we can get our country back on track.”
Education secretary ‘can’t speculate’ how long ‘working people’ pledge will last
09:01 , Kate Devlin
Education secretary Bridget Phillipson says she “can’t speculate” on whether Labour’s pledge to not raise income tax, NI or VAT on “working people” will apply for the whole five years of this government.The pledge on working people is included in Labour’s manifesto – but without a timeframe.
Follow along this morning as we bring you everything from the Sunday morning political shows ahead of this week’s Labour Budget.
What is reportedly in this week’s Budget?
08:49 , Holly Bancroft
On top of what has been confirmed, here are a number of measures that are reportedly going to be in Labour’s first Budget this week:
National insurance hike for employers
The amount employers will pay in national insurance is reportedly set to rise in the Budget.
Reports have suggested it could be increased to up to two percentage points. It has been reported that the raise would be used in part to fund the NHS.
Ms Reeves will also make a cut to the earnings threshold at which employers start making national insurance contributions, The Times has reported. Both measures are expected to raise £20bn.
Continued freeze on income tax thresholds
A continued freeze on income tax thresholds beyond 2028 has been floated ahead of the Budget. Government sources have insisted it would not be a breach of Labour’s election promise to not tax working people.
A threshold freeze would allow Ms Reeves to raise an estimated £7bn by bringing more people into the tax system.
Capital gains tax on shares
Rachel Reeves will reportedly use her Budget to increase capital gains tax on the sale of shares.
However the rates will not change for selling second homes, The Times reported.
Capital gains on profits from the sale of shares, which is currently levied at a higher rate of 20 per cent, is reportedly going to rise by several percentage points.
What is expected in this week’s Budget?
08:41 , Holly Bancroft
What has been trailed so far from Wednesday’s Budget:
Slash Right to Buy discount
Rachel Reeves is to slash Right to Buy discount given to those purchasing their council house. The move is designed to protect existing stock so thousands more homes remain for rent.
£500m boost for social homes
An extra £500m for the current Affordable Homes Programme will see thousands more houses built. There will also me hundreds of millions of pounds invested in housing projects in Liverpool.
£1.4bn for schools and more childcare
£1.4bn will be set aside in the Budget to rebuild crumbling schools.
£1.8bn will also be allocated for the expansion of government-funded childcare, with a further £15m of capital funding for school-based nurseries.
Ms Reeves has also said she would triple investment in free breakfast clubs to £30m in 2025-26.
Rachel Reeves: Budget is ‘not going to be easy’
08:27 , Holly Bancroft
Chancellor Rachel Reeves has said next week’s Budget is “not going to be easy” but promised it will be a “Budget for the strivers”.
She admitted in an opinion article for The Sun on Sunday: “I will take the tough – but fair – decisions on tax”.
She added: “I have had to make tough decisions in this Budget. Not everything is going to be easy. But let me be clear – I am doing this for hardworking families up and down the country who have been crying out for change.”
Keir Starmer has denied misleading the public over tax rises
Saturday 26 October 2024 11:45 , Alex Ross
Keir Starmer has denied misleading the public over tax rises in the Budget after he suggested “working people” did not make money from property or shares.
The prime minister also rejected claims he had waged a “war on middle Britain”.
At a press conference at the end of the Commonwealth heads of government meeting (Chogm) in Samoa on Saturday, the prime minister was asked whether he was “plotting a war on middle Britain”.
“No. Let me clear about that,” he said. “What we’re doing is two things in the Budget.
“The first is fixing the foundations, which is dealing with the inheritance that we’ve got, including the £22 billion black hole. We have to deal with that. In the past leaders have walked past those problems, created fictions, and I’m not prepared to do that.”
Asked whether he had misled the public in the Labour manifesto, he added: “No, we were very clear about the tax rises that we would necessarily have to make, whatever the circumstances, and you’ve listed them there, and I listed them, I don’t know how many times in the campaign.
“We were equally clear in the manifesto and in the campaign that we wouldn’t be increasing taxes on working people, and spelt out what we meant by that in terms of income tax, in terms of NICs [National Insurance contributions] and in terms of VAT and we intend to keep the promises that we made in our manifesto.”
Labour Budget must tackle “black hole” in family finances, charity says
Friday 25 October 2024 13:57 , Albert Toth
New research by the Joseph Rowntree Foundation ahead of next week’s Budget shows the ongoing “black hole” in family finances, particularly affecting the poorest families, with many already £700 worse off than they were five years ago.
They are calling on the government to act on the findings and take action on hardship at the upcoming event.
Katie Schmuecker, Principal Policy Adviser at JRF, says: “The Budget on October 30th is not just a book-balancing exercise, it is a statement of political intent.
“The Labour manifesto described the need for emergency food parcels as a moral scar on our society, so it is inconceivable that there will not be a serious plan to protect families from hardship this winter and beyond.
“Last year Labour condemned the fact that 1 million children experienced destitution in a single year as a damning indictment of the Conservative government. A Labour government now has the power to take urgent action and people are looking to them to act.”
Budget rumours: Private equity profits
Friday 25 October 2024 13:30 , Albert Toth
In a manifesto pledge, Labour said it will announce more details on plans to close the private equity tax loophole in the October Budget.
Due to the ‘carried interest’ law, private equity fund managers pay only 28 per cent tax on their income, which is treated as capital gains. This was the result of a successful lobbying campaign in 1987.
Labour has vowed to change this, making managers pay the 45 per cent higher rate of income tax. It is estimated the change will raise around £600 million a year with just a few thousand people affected.
Rachel Reeves set to borrow billions for investment after announcing major change to fiscal rules
Friday 25 October 2024 11:00 , Archie Mitchell
Rachel Reeves has announced a change to the fiscal rules ahead of next week’s budget, allowing her to borrow billions more each year.
The chancellor today confirmed her rules will “make space for increased investment in the fabric of our economy”, amid widespread expectation she will change the way debt is measured.
Reeves set to borrow billions for investment after announcing change to fiscal rules
Lord Blunkett: Plans to increase NI on pension contributions “very worrying”
Friday 25 October 2024 09:10 , Albert Toth
Veteran Labour politician Lord Blunkett has expressed his concerns over rumoured plans to reform pension tax relief, extending employers’ national insurance contributions.
Writing in the times, he said: “The widespread reporting of a possible extension of employers’ national insurance in next week’s budget is very worrying. It is one thing to increase the rate of national insurance, and quite another to levy this on employer pension contributions.
“As the former work and pensions secretary who signed off, with Tony Blair and Gordon Brown, pensions auto-enrolment — which recognised the genuine crisis, for generations to come, in maintaining living standards in retirement — I would advise strongly against this.
“We need more employers contributing more than the basic 3 per cent and, with it, the corollary of savings and investment, not less. I sincerely hope the rumours are well wide of the mark.”
Rachel Reeves set to borrow billions for investment after announcing major change to fiscal rules
Friday 25 October 2024 07:00 , Alexander Butler
Reeves set to borrow billions for investment after announcing change to fiscal rules
Air Passenger Duty may go up in Reeves’s Budget – could the ‘Inverness Immunity’ come to an end?
Friday 25 October 2024 06:00 , Simon Calder
A week from now, the chancellor will be rehearsing for her first Budget. With rises in the most significant taxes – such as income tax and VAT – ruled out, Air Passenger Duty (APD) looks ripe for an increase, writes Simon Calder.
Read his expert advice:
Air Passenger Duty may rise in Reeves’s Budget – could the ‘Inverness Immunity’ end?
How make-or-break Budget has fractured Keir Starmer’s cabinet
Friday 25 October 2024 03:00 , Albert Toth
Rachel Reeves’ Budget is a make-or-break moment for Sir Keir Starmer’s government, potentially sparking a decade of national renewal – or sowing the seeds of Labour’s downfall.
The prime minister’s poll ratings are at rock bottom after just over 100 days in charge, and the much-hyped “tough choices” to be unveiled on October 30 will likely do little to help boost his appeal.
How make-or-break Budget has fractured Keir Starmer’s cabinet
Rachel Reeves to turn on spending taps with Budget boost for infrastructure and clean energy
Friday 25 October 2024 02:00 , Alexander Butler
Rachel Reeves to turn on spending taps with Budget boost for infrastructure
How Labour could push through ‘stealth’ income tax rise at the Budget
Friday 25 October 2024 00:01 , Albert Toth
Labour is expected to extend an income tax measure that has been described as a “stealth tax” at the upcoming Budget as more people are set to pay higher rates.
Officials have said Rachel Reeves is looking to extend the freeze on income tax thresholds, which has dragged millions of earners into paying higher rates of income tax since 2021.
How Labour could push through ‘stealth’ income tax rise at the Budget
Rachel Reeves set to borrow billions for investment after announcing major change to fiscal rules
Thursday 24 October 2024 21:00 , Albert Toth
Rachel Reeves has announced a change to the fiscal rules ahead of next week’s budget, allowing her to borrow billions more each year.
The chancellor today confirmed her rules will “make space for increased investment in the fabric of our economy”, amid widespread expectation she will change the way debt is measured.
How Reeves might unlock £57 billion at the budget in ‘simple’ fiscal rule change
Rachel Reeves to turn on spending taps with Budget boost for infrastructure and clean energy
Thursday 24 October 2024 18:00 , Archie Mitchell
Rachel Reeves will turn on the spending taps to upgrade Britain’s creaking infrastructure and invest in the clean energy transition, she will tell world leaders today.
The chancellor is planning to change the government’s fiscal rules to free up billions of pounds of borrowing, which she will promise to spend laying “the foundations of future growth”.
Rachel Reeves to turn on spending taps with Budget boost for infrastructure
“Taxes will need to rise”: Reeves pens letter ahead of Budget
Thursday 24 October 2024 15:55 , Albert Toth
The chancellor has published an article for the Financial Times where she discusses her fiscal rules. It’s the strongest hint yet that she will be revising Labour’s rule around debt on 30 October:
“My fiscal rules will do two things. The first and most important: my stability rule will mean that day-to-day spending will be matched by revenues.
“Given the state of the public finances and the need to invest in our public services, this rule will bite hardest. Alongside tough decisions on spending and welfare, that means taxes will need to rise to ensure this rule is met. I will always protect working people when I make these choices, while taking a balanced approach.
“Crucially, my stability rule will also cover the interest on our national debt and unlike the previous government I won’t cut capital budgets to make up for shortfalls in the day-to-day running costs of departments.
“My second fiscal rule, the investment rule, will get debt falling as a proportion of our economy. That will make space for increased investment in the fabric of our economy, and ensure we don’t see the falls in public sector investment that were planned under the last government.
“We will invest alongside business, through expert bodies like the National Wealth Fund, multiplying the impact of public money. And I will invest wisely — we won’t just increase investment, we will also invest differently. We won’t repeat the costly mistakes of the past.”
Starmer discusses Budget in Samoa
Thursday 24 October 2024 14:19 , Albert Toth
Speaking while travelling to Samoa for a meeting of Commonwealth leaders, Sir Keir addressed Labour’s inheritance from the Conservatives head on, saying: “I am not prepared to walk past it.”
“Obviously there are other Budgets to come but this is a significant one which will set the approach, the framework if you like, and it will give a sense of how we intend to do business.
“We are going to tackle the inheritance in this Budget.
“I’m not prepared to walk past it. I’m not prepared to put it off and that is a signal of the way I want to do business which is not to pretend our problems aren’t there, it’s to actually roll up our sleeves and deal with it.”
Budget will ‘face up’ to black hole in public finances, Keir Starmer vows
Thursday 24 October 2024 11:30 , Archie Mitchell
Sir Keir Starmer has said the Budget will “face up” to the reality of Labour’s inheritance from the Conservatives as Rachel Reeves prepares to borrow tens of billions of pounds to invest in Britain’s crumbling infrastructure.
Ahead of the party’s first Budget in 15 years, the prime minister promised to tackle the hole left in Britain’s public finances and give the public “a sense of how we intend to do business” going forward.
Budget will ‘face up’ to black hole in public finances, Keir Starmer vows
How could a change to debt rules ‘unlock’ £50bn for Labour?
Thursday 24 October 2024 10:13 , Albert Toth
Rachel Reeves will reportedly unveil a major change to Labour’s fiscal rules at the budget on 30 October by borrowing billions for infrastructure investment.
Following weeks of speculation, the chancellor will reveal her plans to change Britain’s debt rules at the International Monetary Fund’s (IMF) annual meeting in Washington on 24 October.
There’s a few ways she could do this – here’s everything you need to know:
How Reeves might unlock £57 billion at the budget in ‘simple’ fiscal rule change
Reeves confirms disposable vape ban as new taxes still on the cards
Thursday 24 October 2024 09:52 , Albert Toth
The sale of disposable vapes will be banned in England and Wales from next year.
Under legislation laid out by the Labour government in Parliament, it will be illegal for retailers to sell the devices from 1 June 2025.
It has been reported that Rachel Reeves is also considering raising the tax further as part of her Budget to be unveiled at the end of the month.
Labour has already outlined its ambition to reduce the amount of young people smoking or vaping, bringing in new rules as part of the Tobacco and Vapes Bill.
Labour’s war on vaping explained: From disposable ban to higher taxes
ICYMI: Reeves considers ‘Amazon tax’ in business rates reform drive
Thursday 24 October 2024 07:00 , Albert Toth
The chancellor is reportedly considering a new ‘Amazon tax’ that would see business rates paid my online tech giants increased.
Industry sources understand that a consultation will be launched after Ms Reeves announces the Budget on 30 October. This means the plans may get a mention.
It comes after Labour wrote in its manifesto that it would reform the business rates system to “level the playing field between the high street and online giants.”
The manifesto added that the current system “disincentivises investment, creates uncertainty and places an undue burden on our high streets.”
Budget rumours: Inheritance Tax reform
Thursday 24 October 2024 04:00 , Albert Toth
Inheritance tax is a levy on the estate of someone who has died. This is their property, money and possessions. Crucially, it is not paid if the value of these things is below £325,000.
The tax rate is 40 per cent, but it’s only charged on the part of the estate that’s above the threshold. In 2023/24, only 5 per cent of deaths generated an inheritance tax bill, raising around £7 billion.
However, the IFS writes that the tax measure “is littered with special exemptions”. These include a business relief, the ability to pass on agricultural land tax-free, and the tax-free passing on of pension pots.
The economic think tank says that ending these measures alone would raise £4.8bn a year by 2029.
ICYMI: Rachel Reeves boosted by big drop in inflation as she seeks £40bn in Budget tax rises
Thursday 24 October 2024 01:00 , Albert Toth
Rachel Reeves has been boosted by a sharp drop in inflation as she seeks to find £40bn of tax hikes and spending cuts in this month’s Budget.
The chancellor will welcome the dip, which saw inflation fall under the Bank of England’s 2 per cent target for the first time in more than three years, as she prepares for what promises to be a brutal Budget.
Rachel Reeves boosted by big drop in inflation as she seeks £40bn in Budget tax rises
Budget rumours: Taxing pension savings
Wednesday 23 October 2024 22:00 , Albert Toth
Pension tax relief is a reduction of the amount of tax paid on private pensions. It helps workers save for retirement by boosting their pension pots.
The amount of tax relief a person is granted is based on their income tax. It will effectively cancel out tax on pension contributions up to a maximum of £60,000.
After this, contributions will be taxed at either 20, 40, or 45 per cent, depending on which income tax rate the worker falls into.
However, the chancellor is thought to be considering a flat 30 per cent pension tax relief rate. This would mean that higher earners would effectively pay 10 per cent in tax, while those on the additional rate would pay 15.
The measure would raise around £3 billion a year, with 7 million earners paying more tax. But it would be better news for basic rate earners, who would actually begin to receive a 10 per cent boost to their pension contributions.
Evaluating the idea last year, the IFS said it would “redistribute the burden of taxation from the bottom 80 per cent to the top 20 per cent of earners.”
ICYMI: Millionaires urge Reeves to raise £14bn from capital gains tax changes at Budget
Wednesday 23 October 2024 19:00 , Albert Toth
Rachel Reeves should increase capital gains tax (CGT) at Labour’s upcoming Budget, a group of millionaire business owners have urged, estimating the measure would raise £14bn a year.
In a report by the IPPR think-tank, analysts have consulted with wealthy entrepreneurs who say higher CGT would not have stopped them from making investments in the UK.
Millionaires urge Reeves to raise £14bn from capital gains tax changes at Budget
Budget rumours: Capital Gains reform
Wednesday 23 October 2024 16:00 , Albert Toth
Capital Gains Tax (CGT) is paid on the profit made when an asset which has increased in value is sold. It is applied to things like the sale of personal possessions worth more than £6,000 (apart from a car), property that’s not the seller’s main home, shares and business assets.
It is charged at 10 or 18 percent for basic rate taxpayers, and 20 or 24 for higher or additional rate earners. There is a tax-free allowance of £3,000.
There are several ways CGT could be changed. In the run-up to the election, the Lib Dems and Greens both said they would rethink the tax bands to be more similar to income tax, raising an estimated £5.2bn a year.
ICYMI: Wes Streeting warned inflation-busting NHS Budget deal will not be enough
Wednesday 23 October 2024 14:44 , David Maddox
Fears have been raised that Wes Streeting’s inflation-busting funding deal for the NHS will not be enough for him to pay for the reforms he wants to drive through.
Sources have told The Independent that the Department for Health and Social Care is set to get about 4 per cent – between £7bn and £8bn – as Mr Streeting confirmed that he has mostly agreed his settlement with chancellor Rachel Reeves. Inflation is currently running at 1.7 per cent.
Wes Streeting warned inflation busting NHS Budget deal will not be enough
Could the chancellor introduce an ‘Amazon tax’?
Wednesday 23 October 2024 13:45 , Albert Toth
The chancellor is reportedly considering a new ‘Amazon tax’ that would see business rates paid my online tech giants increased.
Industry sources understand that a consultation will be launched after Ms Reeves announces the Budget on 30 October. This means the plans may get a mention.
It comes after Labour wrote in its manifesto that it would reform the business rates system to “level the playing field between the high street and online giants.”
The manifesto added that the current system “disincentivises investment, creates uncertainty and places an undue burden on our high streets.”
Mayors in talks to soften local transport cuts – reports
Wednesday 23 October 2024 11:49 , Albert Toth
Local mayors have reportedly engaged in a last-minute lobbying campaign to persuade the chancellor to soften potentially hundreds of millions in transport cuts.
There are fears bus, tube and tram projects in all 12 combined authorities represented by metro mayors could be at risk of underfunding. Following the local elections in May, 11 of these posts are held by Labour mayors.
“The mayors have been pushing back on the idea that their sustainable budgets should be cut, not least because many of them thought the money was guaranteed until 2027,” one official told The Guardian.
With the Budget only a week away, Ms Reeves will have already submitted her proposals to the Office for Budget Responsibility, making any last-minute changes unlikely.
The chancellor already made a substantial cut to rail infrastructure projects in July, when she announced the cancellation of the Tory-era Restoring Your Railways project alongside unveiling the £22bn shortfall in public spending:
The 36 rail projects at risk of being scrapped to plug Labour’s £22bn black hole
What should I do with my savings ahead of the Budget?
Wednesday 23 October 2024 10:18 , Howard Mustoe
Ahead of the Budget on 30 October, there has been fevered speculation about changes to pension savers’ tax allowances and other perks.
Reports that pensioners could have tax breaks cut or axed led to savers withdrawing chunks of their retirement pots ahead of Chancellor Rachel Reeves’s big announcement.
What should I do with my savings ahead of the Budget?
UK economy to grow faster than thought in pre-Budget boost for Reeves
Wednesday 23 October 2024 09:09 , Albert Toth
The UK economy will grow faster than previously thought as lower inflation and borrowing costs lead to a boost in business activity, a boost for chancellor Rachel Reeves as she aims to fix the nation’s finances.
The update from the International Monetary Fund also suggested that the fight against inflation and the cost of living crisis had “largely been won”.
UK economy to grow faster than thought in pre-Budget boost for Reeves
Jeremy Hunt “had a tough job” says Rachel Reeves
Wednesday 23 October 2024 07:36 , Albert Toth
Chancellor Rachel Reeves has said she has a “good relationship” with her predecessor Jeremy Hunt.
“I may not be particularly impressed with the state of the public finances that he left me, but I do recognise that after Kwasi Kwarteng, he had a tough job to do as well,” she told BBC Radio 5 listeners.
She adds that if there were one person she could “pick up the phone to now” it would be Alistair Darling, who delivered Labour’s last budget in 2010.
The veteran politician died last year at the age of 70. He served in cabinet for 13 years under both Tony Blair and Gordon Brown, working as chancellor during the 2008 financial crisis.
“I hope that he would be proud of what I’m doing as the next Labour chancellor after him,” Ms Reeves said.
How make-or-break Budget has fractured Keir Starmer’s cabinet
Wednesday 23 October 2024 07:00 , Alexander Butler
How make-or-break Budget has fractured Keir Starmer’s cabinet
Budget 2024: Inheritance tax set to rise – here’s what it means for you
Wednesday 23 October 2024 06:00 , Alexander Butler
Inheritance tax set to rise – here’s what it means for you
Public sector pay rises hand Reeves a £6.7bn headache ahead of Budget
Wednesday 23 October 2024 04:00 , Alexander Butler
Public sector pay rises hand Reeves a £6.7bn headache ahead of Budget
Inheritance tax already up 10 per cent as Reeves looks to squeeze levy in Budget, official figures show
Wednesday 23 October 2024 02:00 , Alexander Butler
Brits are already paying 10 per cent more on inheritance tax before Reeves’ budget
Wes Streeting warned inflation-busting NHS Budget deal will not be enough
Wednesday 23 October 2024 00:01 , Alexander Butler
Wes Streeting warned inflation busting NHS Budget deal will not be enough
Air Passenger Duty may go up in Reeves’s Budget – could the ‘Inverness Immunity’ come to an end?
Tuesday 22 October 2024 22:00 , Simon Calder
Air Passenger Duty may rise in Reeves’s Budget – could the ‘Inverness Immunity’ end?
Tax on high earners ruled out as Rachel Reeves looks to plug £40bn Budget black hole
Tuesday 22 October 2024 20:00 , Alexander Butler
Tax on high earners ruled out as Rachel Reeves looks to plug £40bn Budget black hole
UK economy to grow faster than thought in pre-Budget boost for Reeves
Tuesday 22 October 2024 18:00 , Alexander Butler
Inheritance tax already up 10 per cent as Reeves looks to squeeze levy in Budget
Tuesday 22 October 2024 16:00 , Kate Devlin
Britons are already paying more inheritance tax as Rachel Reeves looks to squeeze millions more from the levy, official figures show.
Payments swelled the Treasury’s coffers by £4.3bn in the six months since April, £400m more than in the same period in the previous financial year and a rise of 10 per cent, new data from HM Revenue and Customs shows.
Brits are already paying 10 per cent more on inheritance tax before Reeves’ budget
Borrowing figures show “scale of public finances challenges” says expert
Tuesday 22 October 2024 15:00 , Albert Toth
Government spending so far this financial year was £11.5 billion more than forecast by the OBR, points out The Resolution Foundation, which tallies with Rachel Reeves’ claim of a £22 billion “black hole” in the public finances.
The foundation’s senior economist Cara Pacitti said: “Six months into the financial year, Britain is borrowing £6.7 billion more than expected at the time of the Budget in March.
“This reflects central government spending which is £11.5 billion higher than anticipated, largely due to public sector pay rises and higher running costs.
“Today’s data highlights the scale of the public finances challenges facing the Chancellor as she grapples with overspending today, the need to avoid austerity in the future, and having to fund extra public service spending through tax rises.”
GDP due to grow in 2024 in major uplift, says IMF
Tuesday 22 October 2024 14:05 , Archie Mitchell
The IMF has said UK gross domestic product (GDP) is due to grow by 1.1 per cent in 2024 – a major uplift from the 0.7 per cent growth forecast from July.
The UK economy is then expected to grow by 1.5 per cent in 2025, with the IMF maintaining its prediction from earlier in the year.
The IMF report also found that UK inflation for 2024 is set to be slightly higher than expected at 2.6 per cent, having previously pointed towards a 2.5 per cent reading.
It likewise slightly increased its inflation projection for 2025 to 2.1per cent from 2per cent in its previous outlook.
Unemployment is also set to be slightly worse than previously expected by the IMF, according to the latest report.
It said the UK unemployment rate is set to have been 4.3per cent for 2024 as a whole, compared with a previous 4.2per cent estimate.
