Displaying items by tag: cost of borrowing

The Government faces a £41.2 billion shortfall that could force Rachel Reeves to raise taxes this autumn to meet her own borrowing rules, according to the National Institute of Economic and Social Research (NIESR). Reeves has pledged that day-to-day spending will be covered by tax revenue and that national debt must fall as a share of income within five years. NIESR recommends moderate tax rises, including reforming council tax and expanding the scope of VAT, to reassure investors. Labour has previously ruled out tax hikes on 'working people’, but Reeves now faces a difficult balance between honouring manifesto promises, controlling debt, and funding public services. NIESR also urged the Government to focus on growth, productivity, and welfare reform. The poorest 10% remain worse off than before Covid. With sluggish growth projected, the autumn Budget is expected to be the most challenging of this Parliament. Breaking news: the Bank of England has cut its interest rate to the lowest for four years, which will benefit those paying mortgages. See