Rachel Reeves Unveils Landmark Budget: Tax Hikes and New Fiscal Rules

Rachel Reeves, British finance minister, presented her first budget with significant tax increases and changes to fiscal rules. Major points include eliminating budget deficits by 2029/30, raising business taxes, and restructuring inheritance taxes. Infrastructure investment and spending on health and education are key areas of focus.

In a landmark move, British finance minister Rachel Reeves presented her first budget statement, revealing the largest tax hikes since 1993 and modifications to fiscal rules aimed at boosting investment through increased borrowing.

Reeves emphasized the elimination of the current budget deficit by the 2029/30 tax year, introducing an investment rule that permits heightened infrastructure expenditure while reducing debt's share of the economy. The changes are expected to create a fiscal headroom of 15.7 billion pounds by the deadline.

Significant adjustments in tax policy were also announced: business social contributions will rise to 15%, and inheritance tax thresholds will remain frozen until 2030, among other changes. Additionally, Reeves outlined substantial spending commitments on health, education, and military, betting on long-term economic growth.

(With inputs from agencies.)