Rachel Reeves Sharad Budget will see significant tax growth

Two very different reports have ruled the UK Economic Glome in the last four days.

Friday’s economic data showed another monthly dip in the development of the UK in May, or GDP. Earlier this week, the official forecaster, the Office for Budget Responsibility (OBR) stated that the UK suffered “challenging” risks, including the possibility that the level of government debt could increase by three times the size of the economy.

Two very different time – on time – economy in a month, and public finance in half a century time.

In another moment, both must have been ignored to a large extent. Monthly GDP figures are notorious unstable, and what does a debt forecast for 2075 mean? What will tell us about this year’s forecast from 1975?

But these very different charts are set tone for some difficult decisions required by autumn and hard calls about what happens in the next half decade.

Really unusual about Long -term risk and stability report of OBR The words of his boss Richard Hughes had the strength.

He said, “Britain cannot tolerate the array of promises that are displayed to the public,” based on proper perceptions about their cost and increase, he said.

The report also cited a pattern, which also mentions a U-turn on many governments, taxes and expenses.

It came within the days of the government’s reverse on welfare savings and winter fuel payment.

In 36 advanced economies, the UK now has the sixth highest loan, fifth highest annual lending, and the third highest borrowing cost is “weak”, compared to other countries, compared to future crises, OBR found.

The clear message was that repeated borrowing is not a long-term solution for the pressure of day-to-day expense.

Still the pressure to spend more can prove to be stubborn, thanks to geopolitical and social changes.

Existing forecasts of OBR believe that post-pandemic growth in cases of disability and disability will return to half the way by 2029.

This is very uncertain. Local councils are now spending 58% of their revenue on social care for adults and children, some councils are spending more than 80%.

A £ 4.6BN Special Financial System to deal with the budget of special educational requirements large local authority insolvency.

The promise to increase defense spending for a new NATO target of 3.5% will cost about £ 40BN per year by 2035.

The OBR report was originally a humble petition for some realism about further options.

Large -scale majority and four more years of government will generally expect to have the strength to make such decisions.

As Told before last electionWith the public, there was very little effort of level level level on taxation.

The big picture is that this autumn budget can see the increase of tax further from £ 10bn to £ 20bn.

At its top, Trump’s tariff has triggered intensive uncertainty. This has carried forward the cost of borrowing the UK government. But they are also inspiring more fundamental changes in the foundation of the global economic system, with dollars and US government debt no longer an unwavering safe haveon.

So how can Chancellor answer these challenges?

She can opt for the rebuilding of the so-called “headroom” to give him a better chance of completing his self-looked borrowings. Currently that buffer is a very tight £ 10bn.

Reeves has said that he will not stick to his plans for not lending day-to-day expenses and despite some concerns with MPs, to fall government loans as part of national income by 2029/29.

But she is considering the advice of the International Monetary Fund to accommodate his plans once a year instead of both spring and autumn.

But this autumn budget may still require a kitchen sink approach, the Chancellor threw everything in fixing public finance.

The ministers have not left the idea of finding savings in the welfare bill related to health.

A discussion is opening about whether individual freedom payment (PIP) benefits, designed to help pay for physical equipment, is the right vehicle to manage specific growth in mental sick health.

On the other hand, while politicians admitted that the cost of the state pension triple lock is more than the forecast, the policy seems to be completely politically imperfect.

So we are going for significant tax growth. Further expectation on Income Tax Thracehold will not be sufficient.

The noise around the money taxes indicates property and inheritance taxation, as baby boomers begin a large -scale transfer of housing equity pounds for their children.

Expect the Treasury to think very hard to think about what size he can be in water, how can he ensure a bouctive revenue revenue, aimed at funding the costs of an aging society without the burden on the houses that fully work.

Of course The Great Hope is a return to strong economic development to smooth.

The fiscal regulations of the Reeves have left space for long -term investment in the infrastructure, although the plan reforms will take some time to produce a construction bounce. The position of Britain as a comparatively stable island in the sea of business tumors should also receive dividends.

Some of the world’s most important business people, such as Jensen Huang of Nvidia, were falling on themselves to praise Britain’s investment ability for Frontier Tech.

Very latest economic news involves some perking-up in the level of confidence in the last few weeks, and more interest rate cuts are on the way.

Some city economists say that glome is overdone and we are “the worst”. The UK’s stock market and sterling are strong.

So this is a long -term challenge set by OBR, balances books and promotes the economy.

A government which still has a part of four years, has the necessary power, but last month has expressed concern about its right.