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”.
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