UK Chancellor Plans Benefit Cuts, Rejects Tax Hikes

Ahead of the Spring Statement on March 26, Chancellor Rachel Reeves has ruled out tax hikes, opting instead for cuts to public spending and benefits to address government borrowing needs. Despite the announcement of £5bn in benefit cuts, economists predict these measures will not suffice to meet the Office for Budget Responsibility's (OBR) fiscal targets due to dismal economic growth forecasts. The Chancellor's strategy involves reducing departmental budgets in upcoming spending reviews, while maintaining a promise of overall real-term increases in government spending. Additionally, the government is preparing to implement a 4.1% increase in Pension Credit rates effective April 6, benefiting pensioners significantly. This comes amid speculation about potential tax adjustments, including the continuation of frozen tax thresholds that could impact taxpayers financially. As the government navigates these fiscal challenges, the focus remains on balancing public finances without raising taxes directly.