Who will pay more? Key elements from the Budget

After months of speculation and briefings, Rachel Reeves has unveiled £26bn worth of tax rises in her much-anticipated Budget.

- MILLIE COOKE CAITLIN DOHERTY

But in an unprecedented leak just minutes before the chancellor got to her feet, the Office for Budget Responsibility (OBR) published its response to the statement, leaking her entire plan before she even had a chance to unveil it.

The tax hikes, which will leave her with £22bn in fiscal headroom, come on top of the £40bn of tax rises unveiled last year and are set to be delivered by freezing personal tax thresholds and a host of smaller measures. It will bring the tax take to an all-time high of 38 per cent of GDP in 2030-31.

Here are the key takeaways from the chancellor’s long-awaited but much-trailed – budget.

Economic growth

The OBR has predicted that economic growth will be weaker than expected from 2026 to the end of the current Labour government, despite having increased its forecast for economic growth this year from 1 per cent to 1.5 per cent.

In 2026, growth has been downgraded from 1.9 per cent to 1.4 per cent; in 2027 from 1.8 per cent to 1.5 per cent; in 2028 from 1.7 per cent to 1.5 per cent; and in 2029 from 1.8 per cent to 1.5 per cent.

The news will come as a blow to the Labour government, which has put economic growth at the heart of its mission in office.

Tax rises

A freeze on income tax thresholds

More than 1.7 million people face paying more income tax as she froze thresholds until 2030-31, meaning people will be dragged into paying for the first time or shifted into higher bands as earnings increase.

The OBR said the freeze would result in 780,000 more people paying the basic rate, 920,000 more payingthe higher rate and 4,000 more additional-rate income tax payers in 2029/30. The body also estimated this will raise around £7.6bn by 2029-30. Ms Reeves acknowledged the freeze in tax thresholds would hit “working people” - the group Labour had promised to protect - but she was “asking everyone to make a contribution”.