Rolling coverage of the latest economic and financial news, as the City braces for the budget
Goldman Sachs have predicted that Rachel Reeves will increase her budget headroom to £15bn, from £10bn in the last budget, mainly through higher taxes.
Reminder, this is the flexibility to hit government’s first fiscal rule, to be on track to achieve a current budget surplus, where day-to-day spending is less than total revenues in 2029–30.
We expect only modest spending cuts of around £3bn, implying that around £30bn of tax increases are likely required.
After the government reportedly reversed plans to raise income tax rates, an extension of threshold freezes combined with a series of smaller measures now looks the most likely avenue to raise revenues.
Continue reading…Rolling coverage of the latest economic and financial news, as the City braces for the budgetWhat to expect in budget 2025: tax, VAT, pensions, savings and moreGoldman Sachs have predicted that Rachel Reeves will increase her budget headroom to £15bn, from £10bn in the last budget, mainly through higher taxes.Reminder, this is the flexibility to hit government’s first fiscal rule, to be on track to achieve a current budget surplus, where day-to-day spending is less than total revenues in 2029–30.We expect only modest spending cuts of around £3bn, implying that around £30bn of tax increases are likely required.After the government reportedly reversed plans to raise income tax rates, an extension of threshold freezes combined with a series of smaller measures now looks the most likely avenue to raise revenues. Continue reading…
