In the Labour Party’s first fiscal address in 14 years, Chancellor Rachel Reeves announced to MPs today (30 October) a planned £40bn tax increase, one of the largest hikes in recent memory. “Any chancellor today would have to face this reality, and any responsible chancellor would take action,” she stated, emphasizing her focus on restoring stability to public finances and rebuilding public services.
Reeves attributed Britain’s financial challenges to a “broken” system inherited from the previous government, citing a £22bn deficit she attributed to Conservative management. The Labour Budget will prioritize economic stability, investment growth, and support for small and medium-sized businesses, aiming to spur economic activity, foster innovation, and advance clean energy initiatives.
Reeves presented this Budget as a foundation for future investment, which she views as essential for economic growth. Projections from the Office for Budget Responsibility (OBR) indicate expected GDP growth of 1.1% in 2024, rising to 2.0% in 2025, with moderate growth through 2029. Inflation forecasts from the OBR predict an average of 2.5% this year, decreasing to around 2% by 2029, indicating a gradual move toward economic stability.
