Five key trends that will shape the 2025 Budget

The 2025 Budget is set to be delivered against a backdrop of rising unemployment and higher-than-forecast Government borrowing, but amid signs this year's spike in inflation may have peaked.

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Here, we consider five key economic indicators that are likely to shape both the content and the tone of Ms Reeves' speech.

Borrowing

Government borrowing for the current financial year is running at a higher level than forecast and is the highest on record outside the Covid-19 pandemic.

Borrowing stood at £116.8 billion for the seven months from April to October 2025, according to figures published last week by the Office for National Statistics (ONS).

This is £9.9 billion more than the £106.9 billion forecast for this period by the Office for Budget Responsibility (OBR) in March.

It is also the second-highest borrowing figure for April-October since comparable data began in 1993, behind only 2020.

Should borrowing continue to be higher than expected, Rachel Reeves may need to find additional ways to ensure she has enough “headroom” in her Budget to balance the nation's finances.

Economic growth