On Tuesday, UK Finance Minister Rachel Reeves hinted at tax increases for workers next month. In a pre-budget speech, she said, “We will all have to contribute” to improving Britain’s economy.
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AFP reports: In a rare address ahead of the UK's annual budget, Reeves spoke to the nation from Downing Street, warning of "necessary choices" in the November 26 budget as the country struggles with high debt and inflation.
When questioned by reporters afterward, Reeves refused to rule out increases to income and value-added taxes amid speculation that at least one of them could rise to fund public service investments.
“As I make decisions about taxes and spending, I will do what is necessary to protect families from high inflation and interest rates,” Reeves said Tuesday.
Since Prime Minister Keir Starmer’s Labour government returned to power in July 2024, Reeves has raised taxes on businesses in her inaugural budget — a move blamed for weak economic growth over the past year.
On Tuesday, Reeves blamed the previous Conservative administration, which was in power from 2010 to 2024, as well as global pressures, including US tariffs, for Britain’s current economic woes.
"The problem of the last 14 years is that political expediency always came above the national interest, and that is why we are in the mess that we are in today," Reeves said. She also blamed Brexit fallout for current economic woes.
Reeves said Starmer appointed her chancellor "not to always do what is popular, but to do what is right."
Her speech came as Labour trailed the hard-right Reform UK party of Nigel Farage in opinion polls, partly due to Reform UK's anti-immigration stance.
Following the address, the British pound retreated against the dollar.
Dan Coatsworth, head of markets at AJ Bell, said, “Rachel Reeves’s unusual stance of giving a big speech on the eve of the budget has left investors with more questions than answers and has done nothing to remove uncertainty around taxes.”
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