Five key takeaways from the UK's tax-and-spending budget

"British Chancellor Rachel Reeves announced the latest budget on Wednesday, setting out sweeping tax hikes which are projected to raise 26.1 billion pounds ($34.4bn) for the public purse by 2030. The budget had been highly anticipated as a make or break moment for the UK's governing Labour party, which has grappled with poor polling over the past year."

"In an embarrassing turn, the country's Office for Budget Responsibility (OBR) published its economic outlook as a result of the budget on its website two hours before the announcement something it never normally does until afterwards. Reeves called the blunder deeply disappointing and a serious error."

"Reeves acknowledged that the tax rises to be paid in large part by freezing existing income tax thresholds, meaning more people will pay higher tax as their incomes rise with inflation would adversely affect working people. This breaks a key pledge Labour made in its manifesto before last year's general election. We are asking everyone to make a contribution, Reeves told parliament. However, she said the tax rises would help pay for nearly 22 billion pounds ($28.9bn) in fiscal headroom within five years."

The latest UK budget implements sweeping tax hikes projected to raise £26.1bn by 2030, primarily via freezing income tax thresholds that push more taxpayers into higher brackets as incomes rise with inflation. The Office for Budget Responsibility published its economic outlook on the government's website two hours before the budget announcement, a departure from normal practice. The tax changes are expected to create nearly £22bn in fiscal headroom within five years and to reduce annual government borrowing from £138.3bn in 2025–26 to £67.2bn by 2031. The deficit is forecast to move to a surplus by 2028 and to reach a £24.6bn surplus in 2030–31. The additional revenue is allocated to increased welfare spending while avoiding a return to austerity measures.

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