Budget will be 'fair' says Reeves as tax rises expected

After the world has thrown new obstacles our way, Chancellor Rachel Reeves has said she would make necessary choices in the Budget. Reevesdid not rule out a U-turn on Labour's general election manifesto pledge not to raise income tax, VAT, or National Insurance in an unusual pre-Budget address in Downing Street. When journalists asked if the government was going to break the pledge explicitly, she did not respond directly, but said she was

setting the tone for the Budget. Sir Mel Stride, the shadow chancellor, said in a

There isn't any doubt about tax hikes before this address, but there isn’t now. It has been described as the 50-year tax tabooo. Denis Healey, Labour, was the last chancellor to introduce the basic rate of income tax in 1975. However, Reeves refused to go into specifics when asked which taxes would increase. Instead, she began explaining why a year after delivering a tax-raising Budget and promising not to return for more, she is now back for more. Not what is popular, the chancellor said she would do what is needed, not what is trendy. Poor results, she cited, were a result of poor results, including Brexit, austerity, and short-sighted decisions to curb infrastructure spending, persistently high global inflation, and the unease triggered by Donald Trump's tariffs. Reeves' argument is that the failings of others are being investigated within this administration, and that it is incumbent on her to confront decisions that her predecessors rejected. She promised to launch a Budget for growth with fairness at its center aimed at lowering NHS waiting lists, national debt, and living costs.

It's important that people know the circumstances we're facing, the principles guiding my decisions, and why I think they will be the right choices for the country,

It's clear that this Budget will be a bitter pill to swallow,

There are some in government who want this to be a one-and-done Budget, meaning they do not want to come back and again every year, as well as eking out a bit more money in tax to meet the independent forecast's needs. That is seen as an attempt to raise billions of pounds by raising at least one of the income tax rates. However, it would pose a significant risk politically, particularly with widespread public confidence in politics, and Prime Minister Sir Keir Starmer in particular, who is particularly low. In addition, there was also the question of whether the prime minister and chancellor could have argued that none of this was foreseeable prior to last year's Budget. It comes as the Resolution Foundation, which has close links to Labour and was previously managed by Treasury MiNIster Torsten Bell, said that avoiding changes to VAT, NI, or income tax

would do more harm than good. Hiking income tax would be the

for raising money, according to the company, but it should be offset by a 2p cut to employee National Insurance, which would

The Office for Budget Responsibility (OBR), the government's top forecaster, is widely predicted to downgrade its UK productivity forecasts by the end of the month. That could add up to £20 billion to the amount the chancellor will have to find if she is to comply with her self-imposed negotiable rules for government budgets. Reeves said in her address on Tuesday that her commitment to her fiscal laws was iron-clad and that she gave her the most concrete indication yet that she is keen to increase her manoeuvre against shocks.

There is a reward for making these decisions correctly, giving the headroom the confidence to invest and leaving the government freer to act as the situation warrants,

After the last Budget Reeves had £9. There are 9 billion square feet of headroom, but the Resolution Foundation said that subsequent policy shifts and changes in the economic outlook have turned it into a £4 billion black hole. Reeves pleaded with Reevers to double the amount of headroom in order to

send a strong signal to markets that she is serious about improving the public budget, which will reduce medium-term borrowing rates and make future fiscal events less tense. The Institute for Fiscal Studies (IFS), the Institute for Financial Studies (IIS), said last month that there was a

to increase fiscal headroom. According to the think tank, a bigger buffer created instability, and could have changed the chancellor