Wed, 03 Sep 2025

Wed, 03 Sep 2025 Reeves rejects claims of £50bn 'black hole' in finances

The chancellor hit back at the idea that the government faces so large a gap between spending and tax income.
Rachel Reeves, the UK's shadow chancellor, has dismissed forecasts of a £50bn "black hole" in public finances, saying many reports are "talking rubbish". Reeves said she will aim to "get the balance right" at the autumn Budget on November 26, but faced criticism from Conservatives who claimed the government is "stalling" and doesn't have a plan. The cost of long-term government borrowing has risen to a 27-year high, fueling concerns that Chancellor Reeves may need to hike taxes or cut spending. However, Reeves played down the figure, saying an independent think tank had "got their numbers wrong". Reeves has two rules on government borrowing, which she has said are "non-negotiable". She will aim to meet these targets while also returning growth and investment to the economy. The chancellor denied that recent sharp increases in government borrowing costs have hurt her credibility, saying they reflect global pressures. Some commentators have suggested the UK may need a bailout from the International Monetary Fund, but Reeves dismissed this idea as "not acceptable" to serious economists. Reeves said there are "lots of positive signs" in the economy, but acknowledged that more needs to be done to benefit working people. She hinted at possible changes to welfare and tax policies, but refused to confirm or deny specific plans. The chancellor's comments came ahead of the Budget announcement date, which will be revealed soon.
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