The Autumn Budget will not be until at least mid-November, Downing Street has confirmed, with the Treasury still to give the Office for Budget Responsibility (OBR) its ten-week notice to begin writing up forecasts.
A No 10 spokesperson told reporters on Tuesday afternoon the date for the Autumn Budget has not yet been set.
Last year’s Autumn Budget was held on October 30, with reports suggesting the Rachel Reeves planned to hold a Budget around the same time this year.
Previous Chancellors have scheduled the major fiscal event for as late November, with Jeremy Hunt holding 2023’s Budget on November 22.
The absence of confirmation suggests government officials are biding their time as they hope the UK economy can outperform City forecasts and squash fears in bond markets, with leading economists claiming inflation will hit four per cent in September and growth will remain sluggish.
Debate underway in Downing St
No 10 is locked into policy discussions ahead of the Budget as Keir Starmer revamped his team by making the former Treasury minister Darren Jones the chief secretary to the prime minister, a newly-created role focused on policy delivery.
Minouche Shafik, a former Bank of England deputy governor and International Monetary Fund official, has been appointed Starmer’s chief economics adviser.
The economics-focused boost to Downing Street operations has not been received well by bond traders as the 30-year gilt yield reached its highest level this century on Tuesday afternoon.
A number of investors in gilts claimed Labour’s refusal to cut government spending was dampening its fiscal credibility, leading to a mass sell-off.
One asset manager said mooted tax rises to rebuild Rachel Reeves’ fiscal buffer, including extra levies on properties, would lead to an “uncertain impact on revenues” and hamper economic activity.
Big tax raid incoming
Fresh analysis published by Capital Economics suggested the Chancellor would have to raise up to £28bn in taxes due to potential growth downgrades by the Office for Budget Responsibility and higher borrowing costs.
It said hiking “sin taxes” and removing the relief on AIM shares were possible popular tax options open to the government while extending income tax thresholds, justified via a “defence levy” branding, would bring more revenue but political pain.
Tax reform would be the “holy grail” but the task remained “elusive”, according to deputy chief UK economist Ruth Gregory.
“We suspect households and banks will bear the brunt of higher tax rises and the net effect for the economy over the next year would be mildly stagflationary,” Gregory said.