The Chancellor was said to be at the ‘mercy of events’ by not building up a bigger fiscal cushion
Economists are warning that Rachel Reeves may be forced to raise taxes in the autumn Budget due to potential downgrades in economic forecasts. Reeves has refused to rule out tax increases, and the OBR has highlighted downside risks to productivity assumptions. The OBR has also halved its forecast for UK economic growth for 2025. The Autumn Budget is already facing criticism for tax hikes that are seen as hitting growth and businesses. Reeves has implemented cuts to meet spending goals, including a squeeze on the welfare budget. The budget watchdog has acknowledged international factors and a slump in business and consumer confidence since Reeves's first Budget.
