Millions of taxpayers will be dreading Rachel Reeves' upcoming budget (Image: Getty)
Millions of taxpayers will be dreading the upcoming Budget as Rachel Reeves struggles to fill a gaping black hole in the UK’s public finances. The Chancellor, reeling from a series of dire economic figures over the summer, is facing a fresh headache about the looming Budget which comes amid concerns that the shortfall in the government finances could be up to ￡40bn.
What we do know is that the chancellor has set a late budget for November 26 - a month later than last year, which took place on October 30. The later-than-normal date is likely to lead to weeks of uncertainty for Brits and businesses as speculation continues to mount. The make-up of what will be included in the Budget is surrounded in uncertainty, with Reeves rubbishing much of the speculation.
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Chancellor Rachel Reeves planning November budget to boost wages as UK falls behind
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Chancellor Rachel Reeves planning November budget to boost wages as UK falls behind
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Currently, economists believe she will need to find ￡20bn or more to restore the public finances to health with the chancellor reportedly weighing up imposing capital gains tax on main residences worth more than ￡1.5million, a levy currently reserved for second homes and assets such as shares.
Economists are also warning that “things look more likely to get worse than better,” and the Chancellor should be particularly concerned about three things.
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Five things Reeves should be wary of:
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1. Bond yields are unlikely to improve
The last time interest rates on 30-year UK bonds were this high, Rachel Reeves was a first-year student at Oxford in 1998.
The 10-year yields that the Office for Budget Responsibility (OBR) uses to forecast future borrowing costs were also on the rise, hitting the highest level since January, at 4.82%.
Alex Kerr at Capital Economics estimates that the rise in the yield since the Spring Statement will cost the public purse an extra ￡5.8bn per year, according to The Telegraph.
Mortgage experts warn this could translate into higher borrowing expenses for households already under strain.
There are five things Reeves should be wary of (Image: Getty)
2. Inflation is increasing
Reeves has so far been unable to curb inflation with the Office for National Statistics confirming inflation accelerated more than expected to 3.8% in July on the back of higher food prices and airfares.
In a major blow to Labour, inflation is predicted to continue soaring with the Bank of England forecasting it will hit 4% - double the target of 2% - over the next couple of months.
3. Interest rates higher for longer
The Bank of England's Monetary Policy Committee (MPC) cut the UK's base interest rate from 4.25% to 4% on August 7, 2025, to stimulate a struggling economy.
The cut was only narrowly backed by the Bank's policymakers who took two votes to reach a decision.
Lower rates will reduce monthly mortgage costs for some homeowners but it could also mean smaller returns for savers.
Growth in the UK economy slowed in the second quarter of this year (Image: Getty)
4. GDP plunges as economy slows
Growth in the UK economy slowed in the second quarter of this year amid pressure from tariff uncertainty and tax increases, new official figures show. The Office for National Statistics (ONS) said gross domestic product (GDP) grew by 0.3% for the quarter after 0.7% growth in the first three months of the year.
Harry Mills, director at London-based Oku Markets, said the figures are “evidence of a flat-lining economy”.
Tory Shadow Chancellor Sir Mel Stride accused Reeves of “economic vandalism” with business indicators "flashing red.”
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Chancellor Rachel Reeves planning November budget to boost wages as UK falls behind
Six money changes in September to be aware of - will you be impacted?
Rachel Reeves bombshell as new taxes would be ‘last nail in the coffin' for 1 sector
Vainglorious Macron has been brutally exposed by this French humiliation
Lloyds Bank offers competitive 6.25% interest rate on savings account
Nationwide Building Society offers 'highly attractive' 6.5% interest savings account
Nationwide Building Society to raise mortgage interest rates by 0.2% in new blow
Soaring gilt yields spark 'doom loop' fears as mortgage holders face fresh pressure
Rachel Reeves sparks panic as firms refuse to hire new staff over tax raid fears
Nightmare for Brits as Rachel Reeves urged to make painful move to fix UK economy
Rachel Reeves' rotten record laid bare in furious row: '1970s crash is coming!'
Eurozone crisis as inflation surges above 2% in huge blow to UK travellers
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Rachel Reeves told to rip up rules and unleash reckless spending spree - and YOU will pay
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Massive mortgage hikes loom as experts issue warning over Rachel Reeves's ‘doom budget'
Don't axe Rachel Reeves! Markets issue deadly threat as Starmer targets Chancellor
Rachel Reeves announces exact date of Autumn Budget as markets panic
Chancellor Rachel Reeves planning November budget to boost wages as UK falls behind
Six money changes in September to be aware of - will you be impacted?
Rachel Reeves bombshell as new taxes would be ‘last nail in the coffin' for 1 sector
Vainglorious Macron has been brutally exposed by this French humiliation
Lloyds Bank offers competitive 6.25% interest rate on savings account
Nationwide Building Society offers 'highly attractive' 6.5% interest savings account
Nationwide Building Society to raise mortgage interest rates by 0.2% in new blow
Soaring gilt yields spark 'doom loop' fears as mortgage holders face fresh pressure
Rachel Reeves sparks panic as firms refuse to hire new staff over tax raid fears
Nightmare for Brits as Rachel Reeves urged to make painful move to fix UK economy
Rachel Reeves' rotten record laid bare in furious row: '1970s crash is coming!'
Eurozone crisis as inflation surges above 2% in huge blow to UK travellers
Rachel Reeves disaster as UK's borrowing costs hit 27-year high after Starmer reshufle
Britain 'needs its own Javier Milei' to save UK economy from collapse, says Steve Baker
Rachel Reeves told to rip up rules and unleash reckless spending spree - and YOU will pay
HSBC delivers bad news for home buyers amid fears of 'Doom Budget'
Rachel Reeves dealt brutal blow as bookies 'stop taking bets on resignation'
Massive mortgage hikes loom as experts issue warning over Rachel Reeves's ‘doom budget'
Don't axe Rachel Reeves! Markets issue deadly threat as Starmer targets Chancellor
Rachel Reeves announces exact date of Autumn Budget as markets panic
Chancellor Rachel Reeves planning November budget to boost wages as UK falls behind
Six money changes in September to be aware of - will you be impacted?
Rachel Reeves bombshell as new taxes would be ‘last nail in the coffin' for 1 sector
Vainglorious Macron has been brutally exposed by this French humiliation
Lloyds Bank offers competitive 6.25% interest rate on savings account
Nationwide Building Society offers 'highly attractive' 6.5% interest savings account
Nationwide Building Society to raise mortgage interest rates by 0.2% in new blow
5. The rest of the world is in tatters
Currently the biggest threat appears to be coming from France as the French Prime Minister Fran？ois Bayrou risks losing a crucial confidence vote in parliament next Monday. ·
The three-time presidential candidate looks set to be booted out as France’s prime minister.
As the scale of borrowing in both the UK and France is similar, there are concerns that chaos in France could prompt investors to flee Britain too.
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