Treasury chief secretary Darren Jones did not rule out tax increases in the autumn budget. When asked on GB News if he would exclude tax rises later this year, Jones stated, “that will be subject to the OBR forecasts… it’s right that we take these types of decisions in an orderly way.” He added, “You’re going to have to wait.”
This follows a contraction in the UK economy in April, the worst in a year and a half, shrinking by 0.3 per cent. Economists have warned that failing to boost UK growth would “almost certainly” necessitate further tax increases to honour spending commitments for the NHS and defence. The government faces pressure from NATO to raise military spending to 3.5 per cent of GDP, having currently pledged to reach three per cent by 2034.
The Institute for Fiscal Studies (IFS) suggested this likely means “chunky tax” rises as ministers seek an additional £10 to £15bn per year. Businesses have reacted angrily to changes to National Insurance and business property relief announced in Reeves’ budget last October.
Jones attributed a dip in business confidence to global uncertainty triggered by President Donald Trump’s tariff announcement in April. “It’s no surprise that in that month, the market was suppressed because of not knowing what was going to happen.” He also highlighted that the UK was the fastest growing economy in the G7 in the last quarter and had secured a trade deal with the Trump administration.
