Rachel Reeves' Assures No Repeat of Tax Hikes: Businesses Seek Stability

British finance minister Rachel Reeves promises no repeat of the significant 25 billion-pound tax hikes. Businesses reacted negatively to the rise, considering it a burden amidst an economic slowdown. Reeves assures stability, focusing on public service investment while maintaining tax certainty.

In a bid to assuage concerns, British finance minister Rachel Reeves assured businesses on Monday that there will be no repetition of the 25 billion-pound tax hike introduced in her first budget. She made the commitment during the Confederation of British Industry's (CBI) annual conference, aiming to restore confidence among businesses left wary by prior fiscal decisions.

The first budget under the Labour Party in 14 years saw taxes rise by a total of 40 billion pounds, sparking apprehension in the business community. Prime Minister Keir Starmer and Reeves maintained that these increases were necessary for public services like the National Health Service. Reeves emphasized that this financial strategy sets a firm foundation for future stability.

Despite efforts to reassure, the CBI has vocalized its dissatisfaction, particularly over unanticipated changes to National Insurance which they claim have burdened businesses. This critique falls in the context of broader economic slowdowns, posing challenges to the Labour government's growth ambitions. British economic watchdogs warn of limited flexibility should borrowing costs rise.

(With inputs from agencies.)