Wed, 15 Oct 2025

Wed, 15 Oct 2025 Reeves urged to make Budget 'bold' or risk future tax rises

The Institute for Fiscal Studies says the chancellor needs to find £22bn to make up a shortfall.

* The Institute for Fiscal Studies (IFS) projects that Chancellor Rachel Reeves will need to find £22bn in next month's Budget to cover a shortfall in government finances.
* The IFS says it is "almost certain" that taxes will have to be raised, and that finding this amount would allow the government to maintain its current level of headroom (£10bn) but there is a case for increasing this amount further.
* IFS director Helen Miller criticizes Reeves' decision to operate with such tight headroom, saying it leaves her "limping from one forecast to the next" and creates instability.
* The think tank points to rising borrowing costs, weaker growth forecasts, and spending commitments made since the spring as reasons for the government's tight position.
* Reeves has indicated that she may raise taxes in the Budget, but faces a challenge in doing so without breaking manifesto promises, such as increasing National Insurance or Income Tax rates.
  >>