Rachel Reeves is expected to announce the date of her second long-anticipated Budget today, amid increasing turmoil in the financial markets as investors begin betting against Britain. The Chancellor is believed to have selected November 26 as the date she will unveil tens of billions in new tax hikes for hard-pressed families, as she scrambles to fill a £40 billion fiscal black hole.
The Treasury will confirm the date later today, notifying the Office for Budget Responsibility that they have 10 weeks to put together their economic projects which will confirm how much cash Rachel Reeves needs to find through extra taxes or spending cuts. A November 26 Budget would be very late in the year compared to previous Autumn budgets, heavily hinting that the Treasury has been struggling to make its sums add up. Yesterday the Prime Minister’s spokesman insisted Labour had taken decisions “to stabilise Britain’s finances and kickstart economic growth”.
However he refused to comment on recent market turmoil, which has seen Britain’s borrowing costs surge to a 27-year-high.
The country’s gilt yields, the interest rate on money the government borrows, hit 5.72% yesterday, much higher than even during Liz Truss’s mini budget in 2022, which forced her to reverse her tax cuts and eventually depart No. 10 after just 49 days.
Yesterday the pound also fell more than 1% against the Dollar, prompting further uncertainty.
This morning, Shadow Chancellor Mel Stride warned that Rachel Reeves is now heading for economic “disaster”, adding that the markets are voting “no confidence” in the Chancellor.
He said: “The UK’s borrowing costs just hit a 27-year high, it’s a clear warning from the markets and a clear vote of no confidence in Labour.
“When a government borrows and spends like there’s no tomorrow, we all pay the price. Labour promised stability, instead we got soaring debt, doubled inflation and collapsing business confidence.
“Now the Chancellor is planning even more tax rises this autumn. Rachel Reeves is taxing your future to pay for her failure.”
Former Prime Minister Liz Truss said the economy is now in a much worse state under Labour, adding: “We are heading for economic calamity”.
She told The Master Investor podcast she feels no sympathy for Ms Reeves, arguing “these are the people who bought into everything. The economic establishment set.
“They know what happened in 2022, and politically they sought to blame me, even though the Bank of England has subsequently said two-thirds of the spike in the market was down to their failures to regulate pension funds. They’ve used it relentlessly politically against me.
“They’ve repudiated all the ideas I put forward, like keeping taxes low, getting on with fracking, doing necessary deregulation, and now, you know, guilt yields are higher than they were when I was in office.
“The economy is in a much worse state. Debt has risen, and I just see Reeves and Starmer as part of the economic orthodoxy that has ruined this country, and we are heading for a calamity because of that.”