UK Workers Face £10 Billion Tax Burden as Reeves' Fiscal Headroom Disappears

Chancellor Rachel Reeves is facing significant pressure as new forecasts indicate that her £9.9 billion fiscal headroom has evaporated due to sluggish growth and rising government borrowing costs. The Institute for Fiscal Studies (IFS) warns that extending the freeze on income tax thresholds could lead to a stealth tax raid costing workers up to £10 billion by 2030, effectively increasing the tax burden without changing rates. If implemented, this freeze could result in average earners paying hundreds more in taxes, with higher earners facing even steeper increases. Critics argue that Reeves has created a precarious situation for herself by committing to strict fiscal rules amid challenging economic conditions. Meanwhile, businesses are bracing for rising staffing costs linked to tax hikes, further complicating the economic outlook. The Chancellor is expected to address these issues in her Spring Statement on March 26, but major tax measures are not anticipated.