Tax rises at next budget ‘a good bet’ for Britons

Tax rises at the next budget are a “good bet”, economists have suggested.

Earlier we reported that government borrowing reached its highest December level in four years as 2024 came to a close.

The UK has so far borrowed £4.1bn more this financial year than was projected by the Office for Budget Responsibility.

Pantheon Macroeconomics pointed to the cost of government borrowing rising as a “significant” risk to OBR forecasts.

One of its analysts, Elliott Jordan-Doak, said: “The chancellor is already under pressure to clarify how the government will meet its new fiscal rules.

“We expect the government to outline spending reductions – backloaded towards the end of the forecast year – at the next fiscal event in March.

“Further tax increases at the next budget in October, is also a good bet.”

Alex Kerr of Capital Economics suggested Ms Reeves “may need to raise taxes and/or cut spending in the next fiscal statement on 26 March”.