Jitters over the UK’s autumn budget grow as chancellor Rachel Reeves abandons plans to raise income tax on 26 November
This has all left investors '“scratching their heads” and expecting a “death by a thousand cuts” kind of budget, if Reeves hopes to find money to fund key policies including ramped up UK defence commitments, according to XTB’s research director Kathleen Brooks:
The u-turn on income tax rises, while better for growth in a service-based economy, does leave markets scratching their heads about how to fund scrapping the two child benefit cap, the ballooning benefits bill and Britain’s defense commitments.
Instead, the budget is likely to be death by a thousand cuts, in the form of hundreds of tax rises announced on the 26th, which one source called a smorgasbord of fiscal choices for the chancellor.
Kathleen Brooks, research director at XTB notes that Reeves’ change of plans is essentially leaving policy pledges unfunded, with the chancellor now faced with finding an alternative way to raise money to fill an estimated £30bn fiscal hole in (checks watch) less than 2-weeks.
