"Rachel Reeves's budget is expected to announce tax increases worth 26bn to more than double her fiscal headroom, according to figures published before her speech to the commons. In a highly unusual development triggering an immediate reaction in the financial markets, figures from the Office for Budget Responsibility (OBR) published on its website before the chancellor's speech, showed her measures would leave 22bn of headroom in five year's time."
"The measures the chancellor is expected to announce include a three-year freeze on personal tax thresholds, alongside the lifting of the two-child limit on benefits. In the spring, Reeves left 9.9bn in reserve as a buffer. But this is expected to have been more than erased by higher borrowing costs, welfare U-turns and an anticipated sharp OBR productivity downgrade."
OBR figures released before the Commons speech show proposed measures would increase fiscal headroom to £22bn in five years. Planned measures include a three-year freeze on personal tax thresholds and lifting the two-child benefits limit. A previous £9.9bn reserve is expected to have been eroded by higher borrowing costs, welfare reversals and a sharp OBR productivity downgrade. The chancellor plans a broad package of tax measures to address the public finances amid intense government pressure. The early OBR release initially pushed government bond yields down as investors responded to the apparent increase in headroom.
Read at www.theguardian.com
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