Independent

Chancellor warned tax rises needed to fill 51bn black hole in public finances

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Keir Starmer

Office for Budget Responsibility

Ben Riley-Smith

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Naomi Smith

Robert Colvile

UK Trade & Business Commission

Sharon Graham

"Today's #GDP growth figures are still a long way from @Keir_Starmer's target of 2.5% and it is far from clear that we are heading in the right direction."

"The OBR will drop the forecast for 2025/26 growth from 2% to around 1%."

"Labour are promising to be the fastest-growing country in the G7. And our growth forecast is 2% or less every single year of this parliament? Yeah, good luck with that."

"The economy is expected to grow by just over 1 per cent this year, rising to 2 per cent in 2025."

Research shows that "deep alignment with the EU on goods and services will deliver 2.2% economic growth to the UK."

"Closer ties with the EU could deliver growth of up to 2.2%. Clawing back up to half the damage caused by Brexit."

"Certainly, yes [when pressed on whether he was seeking to achieve growth of 2.5 per cent]."

Will the UK Economy Grow By 2% GDP In a Year Under Labour?

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The National Institute of Economic and Social Research (NIESR) has forecasted the U.K. government faces a current budget deficit of £41.2 billion by 2029-30, in theory putting Chancellor Rachel Reeves on track to miss her fiscal rules.

NIESR

The Telegraph

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The National Institute of Economic and Social Research (NIESR) has forecasted the U.K. government faces a current budget deficit of £41.2 billion by 2029-30, in theory putting Chancellor Rachel Reeves on track to miss her fiscal rules.

NIESR claims that to meet her fiscal rules and maintain a £9.9 billion buffer, Reeves would need to raise taxes or cut spending by approximately £51.1 billion annually, equivalent to adding five pence to both basic and higher income tax rates.

Daily Mail

the Guardian

NIESR claims that to meet her fiscal rules and maintain a £9.9 billion buffer, Reeves would need to raise taxes or cut spending by approximately £51.1 billion annually, equivalent to adding five pence to both basic and higher income tax rates.

The think tank found that living standards of the poorest 10% of U.K. households declined by 1.3% in 2024-25 compared to 2023-24 and remain approximately 10% lower than pre-COVID-19 levels.

The think tank found that living standards of the poorest 10% of U.K. households declined by 1.3% in 2024-25 compared to 2023-24 and remain approximately 10% lower than pre-COVID-19 levels.

NIESR expects U.K. economic growth of 1.3% in 2025 and 1.2% in 2026, with inflation averaging 3.3% in 2025 and 2.8% in 2026.

NIESR expects U.K. economic growth of 1.3% in 2025 and 1.2% in 2026, with inflation averaging 3.3% in 2025 and 2.8% in 2026.

Chancellor Reeves has set two "non-negotiable" fiscal rules: the stability rule, requiring day-to-day spending to be matched by tax revenues by 2029-30; and the investment rule, requiring debt to fall as a share of gross domestic product (GDP).

GOV.UK

BBC News

Chancellor Reeves has set two "non-negotiable" fiscal rules: the stability rule, requiring day-to-day spending to be matched by tax revenues by 2029-30; and the investment rule, requiring debt to fall as a share of gross domestic product (GDP).

Founded in 1938 by John Maynard Keynes and William Beveridge among others, the NIESR claims to be the "Britain's longest established independent research institute." According to Reeves, the next Budget will be delivered in autumn this year.

Commonslibrary

Founded in 1938 by John Maynard Keynes and William Beveridge among others, the NIESR claims to be the "Britain's longest established independent research institute." According to Reeves, the next Budget will be delivered in autumn this year.

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Metaculus #0

To meet her fiscal rules and maintain a £9.9 billion buffer, Reeves would need to raise taxes or cut spending by approximately £51.1 billion annually, equivalent to adding 5 pence to both basic and higher income tax rates.</span

The Telegraph #

Daily Mail #

To meet her fiscal rules and maintain a £9.9 billion buffer, Reeves would need to raise taxes or cut spending by approximately £51.1 billion annually, equivalent to adding 5 pence to both basic and higher income tax rates.

NIESR expects UK economic growth of 1.3 percent in 2025 and 1.2 percent in 2026, with inflation averaging 3.3 percent in 2025 and 2.8 percent in 2026, above the Bank of England's 2 percent target.</span

NIESR #

NIESR expects UK economic growth of 1.3 percent in 2025 and 1.2 percent in 2026, with inflation averaging 3.3 percent in 2025 and 2.8 percent in 2026, above the Bank of England's 2 percent target.

The budget shortfall stems from weaker economic growth, higher debt interest payments, reversal of welfare cuts saving £5.5 billion annually, and continuation of winter fuel allowance adding £1.5 billion.</span

BBC News #

The budget shortfall stems from weaker economic growth, higher debt interest payments, reversal of welfare cuts saving £5.5 billion annually, and continuation of winter fuel allowance adding £1.5 billion.

Chancellor Reeves has set two non-negotiable fiscal rules: the stability rule requiring day-to-day spending be matched by tax revenues by 2029-30, and the investment rule requiring debt to fall as GDP share.</span

GOV.UK #

Chancellor Reeves has set two non-negotiable fiscal rules: the stability rule requiring day-to-day spending be matched by tax revenues by 2029-30, and the investment rule requiring debt to fall as GDP share.

Tax increases are essential to restore fiscal credibility and prevent market instability. The £41 billion shortfall demands immediate action to rebuild the fiscal buffer and signal commitment to responsible governance. Without decisive tax measures, Britain risks losing international investor confidence.

Tax increases are essential to restore fiscal credibility and prevent market instability. The £41 billion shortfall demands immediate action to rebuild the fiscal buffer and signal commitment to responsible governance. Without decisive tax measures, Britain risks losing international investor confidence.

Reeves facing 50bn black hole as tax pressure mounts

Economic forecasts show modest growth ahead with the government maintaining fiscal discipline through established rules. The focus remains on growing the economy as the best path to strengthen public finances, with planning reforms expected to boost long-term growth prospects by decade's end.

Economic forecasts show modest growth ahead with the government maintaining fiscal discipline through established rules. The focus remains on growing the economy as the best path to strengthen public finances, with planning reforms expected to boost long-term growth prospects by decade's end.

Higher taxes will worsen economic problems by damaging business confidence and reducing investment. Labour's economic mismanagement created this black hole through poor planning and policy reversals. Tax rises will harm working families and slow growth further.

Higher taxes will worsen economic problems by damaging business confidence and reducing investment. Labour's economic mismanagement created this black hole through poor planning and policy reversals. Tax rises will harm working families and slow growth further.

Rachel Reeves will have to make huge tax hikes in autumn Budget to fill a 50 BILLION black hole, economists warn

UK Faces £41bn Budget Gap, Tax Rises Likely Needed

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Recent NIESR figures paint an overly pessimistic picture that doesn't reflect current progress. Whilst there is work to be done, the government is committed to growth without raising taxes through cutting red tape and unlocking billions in investment. With fiscal discipline and a long-term vision, the U.K. is on a path to higher wages, lower inflation, and renewed economic strength.

Recent NIESR figures paint an overly pessimistic picture that doesn't reflect current progress. Whilst there is work to be done, the government is committed to growth without raising taxes through cutting red tape and unlocking billions in investment. With fiscal discipline and a long-term vision, the U.K. is on a path to higher wages, lower inflation, and renewed economic strength.

The Times

Rachel Reeves: The prize is an economy that finally delivers

SkyNews

The latest NIESR analysis reveals a stark reality: the government faces an economic black hole that cannot be ignored. Weak growth, rising borrowing, and unfunded pledges make current plans unsustainable, and this time Reeves can blame no one else but herself. The numbers don’t lie and, whether ministers admit it now or later, promises are set to be broken.

The latest NIESR analysis reveals a stark reality: the government faces an economic black hole that cannot be ignored. Weak growth, rising borrowing, and unfunded pledges make current plans unsustainable, and this time Reeves can blame no one else but herself. The numbers don’t lie and, whether ministers admit it now or later, promises are set to be broken.

afneil

Express.co.uk

How Rachel Reeves blew a 51bn black hole in the economy

There is a 56% chance that the U.K. will have a Labour Prime Minister on Jan. 1, 2030, according to the Metaculus prediction community.

There is a 56% chance that the U.K. will have a Labour Prime Minister on Jan. 1, 2030, according to the Metaculus prediction community.

UK: Think Tank Claims Reeves Faces £41bn Budget Gap

UK: Think Tank Claims Reeves Faces £41bn Budget Gap, Tax Rises Likely Needed

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