Rachel Reeves Unveils Historic Tax Increase to Revitalize UK's Public Services

In her first budget, UK's new finance minister Rachel Reeves announced a £40 billion tax increase to address a £22 billion deficit and stabilize public services, blaming Conservatives for recent shortcomings. Her plan, including higher social security contributions from employers, received positive market reactions.

Britain's newly appointed finance minister, Rachel Reeves, has unveiled the largest tax hike in three decades, aiming to address a staggering £22 billion shortfall. Her first budget comes as a response to what she terms the 'broken public services' left by the Conservatives, who were ousted after 14 years in July's election.

The sweeping reforms will see taxes raised by £40 billion annually, primarily affecting businesses. Reeves has pledged to avoid ballooning public debt and rebuild public services. Her approach seems to have reassured investors, as evidenced by the rise in government bond prices following her announcement.

Among other initiatives, Reeves has proposed increasing employers' social security contributions and altering tax rules on capital gains and inheritances. While she ruled out broadening individual tax burdens, her strategy aims to fortify public finances while promoting infrastructure investment to accelerate economic growth.

(With inputs from agencies.)