Chancellor likely to raise taxes 'to fill £51bn black hole in public finances', experts warn

Chancellor Rachel Reeves is likely to raise taxes as part of “substantial” action needed at the autumn budget to plug a £51 billion black hole in the public finances, a major economic think tank has warned.

Weaker-than-expected recent economic activity, U-turns on welfare cuts and forecast-beating borrowing mean Reeves is on track to miss one of her fiscal rules by £41.2 billion in 2029-30, The National Institute of Economic and Social Research (Niesr) has said.

It cautioned she faces an “impossible trilemma” of trying to meet her fiscal rules while fulfilling spending commitments and upholding a manifesto pledge not to raise taxes.

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