UK Faces Tax Hikes Amid Soaring Defence Spending Pressures

Pressure is mounting on Chancellor Rachel Reeves to increase UK defense spending, potentially necessitating significant tax hikes or spending cuts. Prime Minister Keir Starmer aims to raise defense spending to 2.5% of GDP but faces pressure from U.S. President Donald Trump and military chiefs to reach 3% or even 5%. Meanwhile, recent economic data shows that public sector borrowing has exceeded forecasts, highlighting the government's fiscal challenges. Experts warn that substantial increases in defense spending would require balancing measures, with some suggesting that tax rises are almost inevitable. The economic landscape is further complicated by weaker-than-expected growth and inflation affecting public finances, raising concerns about the sustainability of current fiscal policies. As calls for increased defense funding intensify, the impact on other departmental budgets remains uncertain.