Back to today’s briefing

Story perspectives

Budget Fails to Boost Growth Amid Tax Hikes

12/1/2025

42 4 Full Breakdown

Summary

Story summary

Experts from the Institute for Fiscal Studies and the Office for Budget Responsibility say the budget will not boost growth.
The budget raises £26 billion in taxes by freezing thresholds, a move critics say harms lower earners.
Chancellor Rachel Reeves aims to lift child poverty by lifting the two-child benefit cap and raising the minimum wage.
Labour leadership defends the measures as necessary, even as voters express disappointment.

History

Historical Context

The UK's austerity measures began in 2010 under Chancellor George Osborne, aiming to reduce a £156 billion deficit through public spending cuts and tax increases. These policies disproportionately impacted lower-income families, echoing past Labour initiatives. As of 2023, the ongoing fiscal strategies continue to shape public sentiment and economic stability, with a projected £26 billion tax increase looming.

1 of 2

Story summary

Experts from the Institute for Fiscal Studies and the Office for Budget Responsibility say the budget will not boost growth.
The budget raises £26 billion in taxes by freezing thresholds, a move critics say harms lower earners.
Chancellor Rachel Reeves aims to lift child poverty by lifting the two-child benefit cap and raising the minimum wage.
Labour leadership defends the measures as necessary, even as voters express disappointment.

1 / 2