The Weekly Brief
28-10-2024
Thought of the week
UK chancellor Rachel Reeves will face several challenges on Wednesday as she unveils her first Budget. Not only will Reeves need to plug the £22bn 'black hole' for the current fiscal year, but decisions are also required on the medium-term outlook for departmental spending and public sector investment. How to pay for all of this is the challenge, as we outline in our recent On the Minds of Investors publication. The UK's tax take as a percentage of GDP is already at a 75-year high and policy decisions need to be consistent with the growth focus that was central to Labour's campaign. In terms of borrowing, one would hope the chancellor has learnt the lessons from the 2022 mini-budget, but any major change to the fiscal rules could prompt an unwanted reaction in the Gilt market.
The UK chancellor faces tough decisions this week
UK tax revenue,% of GDP
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