Amid mounting speculation about tax hikes, Chancellor Rachel Reeves pledges a 'fair' budget. Reeves, set to address Downing Street, emphasizes 'fair choices' despite Labour's manifesto ruling out VAT, National Insurance, or income tax increases. Shadow Chancellor Sir Mel Stride warns of impending tax hikes, demanding accountability if promises are broken. The Resolution Foundation, with ties to Labour, deems tax rises 'inevitable', advocating for income tax hikes offset by employee National Insurance cuts. This strategy, they claim, would raise funds while safeguarding workers. The foundation also suggests extending personal tax threshold freezes to boost revenue. Reeves' speech on Tuesday promises a focus on 'fairness and opportunity' to tackle NHS waiting lists, national debt, and the cost of living. She acknowledges the speculation, emphasizing the importance of understanding the economic landscape and her guiding principles. This stance aligns with Prime Minister Sir Keir Starmer's remarks to Labour MPs, emphasizing a 'Labour Budget' built on values. The Office for Budget Responsibility (OBR) is expected to downgrade UK productivity forecasts, potentially increasing the Chancellor's costs. The Treasury's borrowing rules, including avoiding day-to-day spending and reducing government debt, are under scrutiny. The Resolution Foundation urges Reeves to double her fiscal headroom, sending a positive signal to markets and reducing borrowing costs. The Institute for Fiscal Studies supports this call, warning of instability without a larger buffer.
