Rachel Reeves has declined to rule out further tax increases in her upcoming autumn Budget.
In her first Spring Statement on Wednesday, the Chancellor attributed the halving of Britain’s growth forecast for the year to 1% to rising global uncertainty.
However, she also told the Commons that the Government is projected to run a budget surplus of £6bn by 2027-28.
Last autumn, Ms. Reeves raised taxes by a record £40bn in her first Budget. On Wednesday, it was forecast that tax as a share of GDP would reach a record high within three years.
The Office for Budget Responsibility (OBR) cautioned that Ms. Reeves now faces nearly a 50% chance of further tax hikes or spending cuts following her Spring Statement.
The OBR also noted that the likelihood of her meeting her fiscal rule to reduce debt as a share of GDP stands at just 51%, after she allowed only £9.9bn in flexibility to balance the books by 2029/30.
At a later press conference, Ms. Reeves was asked if she could rule out future tax rises at upcoming fiscal events. She responded: “Well, I’m not going to preempt four years’ worth of Budgets. I’ve just delivered a Spring Statement, and from this, you can see how determined I am, and how determined this Government is, to live within the means we set ourselves in last year’s Budget and to grow our economy.”
