UK Chancellor Reeves Expected to Announce Income Tax Hike Amidst Fiscal Challenges

UK Chancellor Rachel Reeves is expected to announce tax increases in her upcoming Autumn Budget, despite the Labour Party's previous pledge not to raise income tax, VAT, or national insurance. Reeves has emphasized that her budget will focus on "fairness and opportunity," addressing the need for fiscal responsibility amid weak economic growth and higher borrowing costs. Analysts predict a necessary tax hike of around £15-25 billion to meet the government's goal of balancing spending with revenue by 2029-30 and reducing national debt, with income tax increases considered the most viable option. The Resolution Foundation, a think tank influential to government policy, suggests targeted tax increases coupled with measures to ease the cost of living, such as reallocating green levies from energy bills to general taxation and removing the two-child benefit cap. Proposed tax measures could also include higher levies on wealthier individuals, such as increased council tax bands, a mansion tax on properties over £2 million, and higher taxes on unearned income. Reeves’ speech aims to prepare the public for these difficult fiscal choices while underscoring the government's commitment to protecting key services like the NHS and supporting working people.