In her first Budget on Wednesday 30th October the Chancellor, Rachel Reeves, faces the unenviable task of trying to achieve three objectives. First, being able to say there will be “no return to austerity” by raising ‘current’ (i.e. excluding investment) spending. Second, kick-starting economic growth by ramping up investment spending. Third, raising taxes, but not by too much to hamper the economy and elongate the cost of living crisis. All while maintaining fiscal credibility and preventing a big rise in gilt yields. It’s a challenge but she may just about manage it. We expect her to announce a net fiscal loosening of about £18bn (0.6% of GDP) in 2029/30 relative to previous plans. The consequence would be looser fiscal policy than previously planned, but higher interest rates than otherwise.
We will be discussing what to expect in the Budget in a 20-minute online briefing at 3pm BST on Wednesday 16th October (register here) and what happened at 3pm GMT on Wednesday 30th October (register here).
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