The recent UK budget introduced by Labour’s finance minister Rachel Reeves involves major tax hikes and increased borrowing, aiming to drive long-term growth through significant investment in public services. The new budget intends to raise an additional £40 billion through tax increases, including a £25 billion boost from employers’ national insurance contributions, while avoiding increases in income tax, employee national insurance, or VAT.
The budget also allows for broader fiscal rules to facilitate investments in infrastructure, education, healthcare, and childcare. In response to these changes, outgoing Conservative leader Rishi Sunak criticized the measures as anti-business. However, the government argues these investments are necessary to support stability and long-term economic growth. Economic forecasts are also optimistic, with the UK’s GDP expected to grow by 1.1% in 2024 and 2.0% in 2025, supported by easing inflation and improving cost-of-living conditions.
