Rachel Reeves must raise taxes to cover £41bn gap, says think tank

Taxes must rise in the autumn if Chancellor Rachel Reeves is to meet her self-imposed borrowing rules, according to an economic think tank.

The government was on track to miss the target it has set itself by £41.2bn, according to the National Institute of Economic and Social Research (Niesr).

It recommended "a moderate but sustained increase in taxes" including reform of the council tax system to make up the shortfall.

Prime Minister Sir Keir Starmer defended the government's handling of the economy, but did not explicitly answer a question about whether taxes would rise in the upcoming Budget.

Asked during a visit to a school in Buckinghamshire whether he disagreed with Niesr's assessment that tax rises would be needed to raise revenue, the prime minister said "some of the figures that are being put out are not figures that I recognise".