Reeves raises UK taxes by £26 bn in day of Budget chaos

Meant to convey stability, the Budget measures, which were accidentally released, leave investors reeling; investigation launched into the 'error'

- PHILIP ALDRICK & JOE MAYES

Chancellor of the Exchequer Rachel Reeves announced £26 billion ($34 billion) of tax increases in a budget that was meant to convey stability but left investors reeling when most of the key measures were accidentally released early.

The policies in the budget, in which Reeves more than doubled her key fiscal buffer to £22 billion, were posted online by the Office for Budget Responsibility about an hour before she rose to speak in the House of Commons. The OBR apologised and launched an investigation into the error, which Reeves described as “deeply disappointing.”

Still, the budget provided little relief for those expecting Prime Minister Keir Starmer’s Labour government to make the hard choices to control costs and break the UK out of its cycle of stagnation. In a disappointment for investors, tax increases were largely backloaded with a freeze on income-tax thresholds for three more years, dragging an estimated 1.7 million more people into higher rates.

UK markets fluctuated after the early release of the OBR report, with gilts swinging between gains and losses. The 10-year yield was one basis point lower at 4.47 per cent in London. The pound was trading higher.

“The budget does little to seriously tackle sluggish growth, low confidence or a bloated public sector financed by a distortive tax system,” said Kallum Pickering, chief economist for Peel Hunt.