Chancellor Rachel Reeves is set to deliver the UK’s Autumn Budget today, outlining a range of tax and spending measures aimed at addressing a significant fiscal gap while fostering economic growth. The statement, scheduled for 12:30 GMT in the House of Commons, reflects the government’s commitment to reducing debt and supporting households amid ongoing cost-of-living pressures.
Reeves has emphasized taking “fair and necessary choices” to achieve key goals, including lowering NHS waiting lists, curbing national debt, and driving what she calls “the biggest drive for growth in a generation.” The budget comes against a backdrop of economic challenges, with the Office for Budget Responsibility identifying a nearly £20 billion shortfall in public finances, necessitating a balanced approach between revenue increases and strategic investments.
Ahead of the formal announcement, the government revealed plans to raise the minimum wage, with the rate for over-21s increasing by 50p to £12.71 per hour in April 2026, and proportional hikes for younger workers and apprentices. While intended to bolster low-income earners, business groups have warned that further wage rises could lead to hiring freezes or job losses, echoing concerns from previous increases.
Taxation changes form a core part of the budget, with the sugar tax being extended to milk-based drinks like milkshakes and flavored milk, potentially adding a few pence to prices or incentivizing manufacturers to reduce sugar content. Reeves has confirmed that income tax rates will not rise, but she is considering extending freezes on tax thresholds, which would drag more people into higher tax brackets as wages increase over time.
Additional revenue-raising measures include capping tax breaks on pension contributions under salary sacrifice schemes, which could generate around £2 billion, and introducing a new levy on high-value homes in England targeting properties worth over £2 million. Proposals also involve requiring all landlords to pay National Insurance, implementing a per-mile tax on electric vehicles to offset declining fuel duty, and reducing tax-free savings limits in cash Isas.
The budget may also address social spending, with Reeves hinting at scrapping the two-child benefit cap that limits universal credit for larger families, a change advocates describe as “life-changing.” Other potential measures include cutting the 5% VAT rate on energy to lower bills and funding paid placements for young people who have been unemployed for over 18 months to boost job prospects.
Economic context underpins these decisions, as the UK grapples with inflation at 3.8%—above the Bank of England’s target—and government borrowing that reached £17.4 billion in October, exceeding forecasts. Despite the International Monetary Fund projecting the UK as the second-fastest-growing major economy in 2025, persistent inflation and debt concerns have shaped the chancellor’s approach.
As the budget is unveiled, its implications for households, businesses, and long-term economic stability will be closely monitored, with Reeves aiming to build a “fairer, stronger, and more secure Britain” through these comprehensive fiscal adjustments.
