UK Chancellor Set to Deliver Tax-Heavy Budget

Economists warn the Chancellor may need to raise 35 billion to 40 billion pounds to meet her fiscal rules, most likely through higher taxes.

British Prime Minister Sir Keir Starmer (L) meeting Chancellor of the Exchequer Rachel Reeves (R) at Downing Street in London on Oct. 28. 2024. Hollie Adams/PA

Chancellor of the Exchequer Rachel Reeves is preparing a budget that is expected to hike taxes as a slowing UK economy and increasing government borrowing leave the Labour government with few alternatives.

The treasury chief will set out the government’s tax and spending plans on Nov. 26, amid a tough economic outlook, with inflation above the pre-COVID-19 pandemic norms at 3.6 percent, and public sector debt at about 94.5 percent of GDP, according to the UK’s Office of National Statistics.