UK finance minister Rachel Reeves on Tuesday hinted at tax increases for workers next month, saying in a pre-budget speech that “we will all have to contribute” to improving Britain’s economy.
In a rare address ahead of a UK annual budget, the chancellor of the exchequer spoke to the nation from Downing Street, warning of “necessary choices” in the November 26 budget as Britain struggles with high debt and inflation.
Questioned by reporters afterwards, Reeves refused to rule out rises to income and valued added taxes amid speculation that at least one of them could increase to fund investments to public services.
“As I take my decisions on both tax and spend, I will do what is necessary to protect families from high inflation and interest rates,” Reeves said Tuesday.
Prime Minister Keir Starmer’s Labour government returned to power in July 2024, and shortly after Reeves hiked a tax on businesses in her inaugural budget — a move that has been blamed for weak economic growth over the past year.
Reeves on Tuesday blamed the previous Conservative administration, in power from 2010 to 2024, and global pressures including US tariffs for Britain’s present economic woes.
“The problem of the last 14 years is that political expediency always came above the national interest, and that is why we are in the mess that we are in today,” Reeves said, also blaming Brexit fallout for current economic ills.
Reeves said Starmer had appointed her chancellor “not to always do what is popular, but to do what is right”.
Her speech came as Labour trails the hard-right Reform UK party of Nigel Farage in opinion polls, in part winning support over its anti-immigration stance.
Following the address, the British pound retreated against the dollar.
“Rachel Reeves’s unusual stance of giving a big speech on the eve of the budget has left investors with more questions than answers, and done nothing to remove uncertainty around taxes,” said Dan Coatsworth, head of markets at AJ Bell.
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