"The government has made boosting the economy a priority, but economists predict growth will remain sluggish partly due to people waiting to see what measures Chancellor Rachel Reeves announces in the Budget. Many analysts expect that tax rises or spending cuts will be needed to meet the chancellor's self-imposed borrowing rules. The Institute for Fiscal Studies is projecting Reeves will need to find 22bn to bolster the government's finances and meet her rules, and will "almost certainly" have to raise taxes."
"But the influential think tank said the chancellor should be "bold" in next month's Budget, and build up a large financial buffer to avoid future spending cuts and tax rises. On Wednesday, Reeves said she was "looking at further measures on tax and spending, to make sure that the public finances always add up". Her comments were seen as the clearest sign yet that tax rises will be in the Budget, with speculation growing over what measures she might take."
The UK economy expanded by 0.1% in August, with manufacturing output rising 0.7% while the services sector recorded no growth. July's figure was revised to a 0.1% contraction. The Office for National Statistics emphasizes three-month rolling figures, which showed 0.3% growth in the three months to August versus 0.2% in the prior period. Chancellor Rachel Reeves is considering tax and spending measures to ensure public finances meet self-imposed borrowing rules. The Institute for Fiscal Studies estimates a £22bn gap and says tax rises are almost certain, urging a financial buffer to avoid future cuts.
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