Business
Key economic data and trends that will shape Rachel Reeves’ Budget
Chancellor Rachel Reeves will deliver her Budget on Wednesday against a backdrop of rising unemployment and higher-than-forecast Government borrowing, but amid signs this year’s spike in inflation may have peaked.
Here, the PA news agency looks at five key economic indicators that are likely to shape both the content and the tone of Ms Reeves’ speech.
– Borrowing
Government borrowing for the current financial year is running at a higher level than forecast and is the highest on record outside the Covid-19 pandemic.
Borrowing stood at £116.8 billion for the seven months from April to October 2025, according to figures published last week by the Office for National Statistics (ONS).
This is £9.9 billion more than the £106.9 billion forecast for this period by the Office for Budget Responsibility (OBR) in March.
It is also the second-highest borrowing figure for April-October since comparable data began in 1993, behind only 2020.
The Government has overshot forecasts this year due to “a combination of lower-than-expected tax receipts and higher-than-expected borrowing by councils and other bodies outside of central government control”, according to the Institute for Fiscal Studies think tank.
It means that when the OBR publishes its new economic forecasts alongside the Budget on Wednesday, total borrowing for the current financial year is likely to be revised up, as it may be for subsequent years.
It is not unusual for a government to borrow in order to spend more than it receives in taxes and other income.
The last time the government spent less than it received was 25 years ago, in 2000/01.
However, borrowing is now running at a comparatively high level and the latest figures are a reminder of how economic forecasts can be subject to a lot of uncertainty.
Should borrowing continue to be higher than expected, Rachel Reeves may need to find additional ways to ensure she has enough “headroom” in her Budget to balance the nation’s finances.
– Economic growth
The OBR’s new forecasts on Wednesday are also likely to include revised estimates for economic growth in the UK.
Growth in 2025 has slowed as the year has gone on.
The size of the economy grew by 0.7% in January-March, by 0.3% in April-June and by just 0.1% in July-September, according to estimates by the ONS.
In addition, the economy is estimated to have contracted by 0.1% in September, driven by a fall in motor manufacturing due partly to the cyber attack on Jaguar Land Rover.
The OBR’s current forecast for growth across the whole of 2025 – published back in March – is 1.0%, rising to 1.9% in 2026.
The UK has recorded annual growth of less than 1% only five times in the past 30 years: in 2008 and 2009 (zero and -4.6% respectively, during the financial crash); 2011 (0.9%), 2020 (-10.0%, during the pandemic) and 2023 (0.3%).
The Chancellor already knows the new GDP forecast for 2025 and this will undoubtedly shape some of the tone of her Budget speech.
Responding earlier this month to the GDP figures for July-September, Ms Reeves said: “We had the fastest-growing economy in the G7 in the first half of the year, but there’s more to do to build an economy that works for working people.
“At my Budget later this month, I will take the fair decisions to build a strong economy that helps us to continue to cut waiting lists, cut the national debt and cut the cost of living.”
– Inflation
The UK’s overall rate of inflation stood at 3.6% last month, down from 3.8% in September, but above the Bank of England’s target of 2%.
It was the first time the rate had fallen month on month since May, suggesting inflation this year may have peaked.
The figure – based on the ONS Consumer Prices Index – is a measure of how much prices have risen on average year on year.
A fall from 3.8% to 3.6% means prices are not rising quite as fast as they were.
Any evidence that the cost of living is easing is good news for the Government and the latest figures will almost certainly be welcomed by Ms Reeves during her speech.
It could also mean the Bank of England is more likely cut interest rates from their current level of 4%, when it makes its next decision in December.
The Bank of England’s own forecasts suggest inflation is on track to fall to the 2% target by 2027.
This would mark a return to relatively low inflation in the UK and the end of a turbulent few years that saw the rate hit 11.1% in autumn 2022.
– Unemployment
Estimates of unemployment in the UK are produced by the ONS but are currently not classed as official statistics.
This is because the figures are based on a survey that has had a low response rate since the pandemic, meaning the data is unreliable and has to be treated with caution.
The trend suggested by the latest figures is that unemployment has risen over the past year, from 4.3% of people aged 16 and over in July-September 2024 to 5.0% in July-September 2025.
This is the highest rate outside the Covid-19 pandemic since 2016.
The OBR’s current forecast for the unemployment rate across 2025 is 4.5% and, given the data from the ONS, it seems likely this figure will be revised upwards on Wednesday.
Rising unemployment is not a backdrop any chancellor would choose for a Budget speech, especially given the confusion over how many people may or may not be out of work.
The unreliability of the unemployment figures has been criticised by many economists and statisticians – including Bank of England governor Andrew Bailey.
Ms Reeves is also facing other signs that point to a weakening jobs market, with the number of people on employee payrolls falling in most of the last 12 months, along with a slowdown in wage growth.
However, the proportion of the workforce classed as economically inactive – who are of working age and not in employment but not currently looking for work – has fallen slightly.
It stood at an estimated 21.0% in July-September 2025, down from 21.6% in the same period a year earlier.
– Retail sales
Lastly, the Chancellor is sure to have noted the latest retail sales figures.
The volume of sales fell 1.1% in October, the first monthly drop since May, according to the ONS.
It follows a strong rise of 0.7% in September, but the fall was larger than economists had forecast and could point to consumers being cautious with their money ahead of the Budget.
There was some feedback from retailers that people were waiting for November’s Black Friday deals, the ONS added.
Rob Wood, chief UK economist at Pantheon Macroeconomics, said: “We expect retail sales volumes growth to remain subdued in November as pre-Budget speculation reaches a fever pitch.
“We still think consumers should return to the high street when the Budget is passed and there is a little more clarity over fiscal policy.”
Some clarity should come on Wednesday, when the Chancellor gets to her feet in the House of Commons to deliver one of the most keenly-awaited Budgets in recent years.
One of Britain’s most prolific rail fare dodgers could face jail after admitting dozens of travel offences.
Charles Brohiri, 29, pleaded guilty to travelling without buying a ticket a total of 112 times over a two-year period, Westminster Magistrates’ Court heard.
He could be ordered to pay more than £18,000 in unpaid fares and legal costs, the court was told.
He will be sentenced next month.
District Judge Nina Tempia warned Brohiri “could face a custodial sentence because of the number of offences he has committed”.
He pleaded guilty to 76 offences on Thursday.
It came after he was convicted in his absence of 36 charges at a previous hearing.
During Thursday’s hearing, Judge Tempia dismissed a bid by Brohiri’s lawyers to have the 36 convictions overturned.
They had argued the prosecutions were unlawful because they had not been brought by a qualified legal professional.
But Judge Tempia rejected the argument, saying there had been “no abuse of this court’s process”.
JSW Jetour T2 Launch: JSW Motors Limited, the passenger vehicle arm of the JSW Group, is reportedly preparing to enter the Indian car market this year. It has partnered with Jetour, a China-based automotive brand owned by Chery Automobile, and the Jetour T2 SUV could be the company’s first product, according to the reports.
Media reports suggest that the launch will happen independently and not under the JSW MG Motor India joint venture. The SUV will wear a JSW badge and name, instead of the Jetour branding. The upcoming SUV will be assembled at JSW’s upcoming greenfield manufacturing facility in Chhatrapati Sambhaji Nagar, Maharashtra.
According to the reports, the company plans to have the vehicle on sale by the third quarter of this year. With this move, JSW aims to establish itself as a standalone carmaker in India.
Expected Powertrain
The SUV is likely to arrive with a 1.5-litre plug-in hybrid setup. Internationally, this hybrid powertrain is offered with both front-wheel drive and all-wheel drive options. It is still unclear which version will be introduced in India.
Design
In terms of design, the T2 is a large and rugged-looking SUV. It has a boxy and upright stance, similar to vehicles like the Land Rover Defender. Despite its tough appearance, it uses a monocoque chassis instead of a ladder-frame construction.
Size
The SUV measures around 4.7 metres in length and nearly 2 metres in width. This makes it larger than the Tata Safari, even though it is a five-seater. A longer 7-seat version is also sold in some markets.
Price
Pricing details for India are yet to be announced. For reference, the front-wheel-drive five-seat T2 i-DM is priced at AED 1,44,000 (around Rs 35 lakh) in the UAE.
Jetour
Jetour is a brand owned by Chinese automaker Chery. Launched in 2018, it focuses mainly on SUVs and is present in markets across China, the Middle East, Africa, Southeast Asia and Latin America.
John Swinney has been pressed over whether this week’s Scottish Budget gives some workers the “smallest tax cut in history” – with Tory leader Russell Findlay branding the reduction “miserly” and “insulting”.
The Scottish Conservative leader challenged the First Minister after Tuesday’s Holyrood Budget effectively cut taxes for lower earners, by increasing the threshold for the basic and intermediate bands of income tax.
But Mr Findlay said that would leave workers at most £31.75 a year better off – saying this amounts to a saving of just £61p a week
“That wouldn’t even buy you a bag of peanuts,” the Scottish Tory leader said.
“John Swinney’s Budget might even have broken a world record, because a Scottish Government tax adviser says it ‘maybe the smallest tax cut in history’.”
Raising the “miserly cut” at First Minister’s Questions in the Scottish Parliament, Mr Findlay demanded to know if the SNP leader believed his “insulting tax cut will actually help Scotland’s struggling households”.
The attack came as the Tory accused the SNP government of increasing taxes on higher earners, with its freeze on higher income tax thresholds, which will pull more Scots into these brackets.
This is needed to pay for the “SNP’s out of control, unaffordable benefits bill”, the Conservative added.
Mr Findlay said: “The Scottish Conservatives will not back and cannot back a Budget that does nothing to help Scotland’s workers and businesses.
“It hammers people with higher taxes to fund a bloated benefits system.”
Hitting out at Labour – whose leader Anas Sarwar has already declared they will not block the government’s Budget – Mr Findlay said: “It is absolutely mind-blowing that Labour and other so-called opposition parties will let this SNP boorach of a budget pass.
“Don’t the people of Scotland deserve lower taxes, fairer benefits and a government focused on economic growth?”
Mr Swinney said the Budget “delivers on the priorities of the people of Scotland” by “strengthening our National Health Service and supporting people and businesses with the challenges of the cost of living”.
He insisted income tax decisions in the Budget would mean that in 2026-27 “55% of Scottish taxpayers are now expected to pay less income tax than if they lived in England”.
The First Minister went on to say that showed “the people of Scotland have a Government that is on their side”.
Referring to polls putting his party on course to win the Holyrood elections in May, the SNP leader added that “all the current indications show the people of Scotland want to have this Government here for the long term”.
Benefits funding is “keeping children out of poverty”, he told MSPs, adding the Budget contained a “range of measures” that would build on existing support.
The First Minister said: “What that is a demonstration of is a Government that is on the side of the people of Scotland and I am proud of the measures we set out in the Budget on Tuesday.”
Meanwhile he said the Tories wanted to make tax cuts that would cost £1 billion, with “not a scrap of detail about how that would be delivered”.
With the weekly leaders’ question time clash coming less than 48 hours after the draft 2026-27 Budget was unveiled, the First Minister also faced questions from Scottish Labour’s Anas Sarwar, who insisted that the proposals “lacks ambition for Scotland”.
Pressing his SNP rival, the Scottish Labour leader said: “While he brags about his £6 a year tax cut for the lowest paid, one million Scots including nurses, teachers and police officers face being forced to pay more.
“Even his own tax adviser says this is a political stunt. So why does John Swinney believe that someone earning £33,500 has the broadest shoulders and therefore should pay more tax in Scotland?”
Mr Swinney, however, said that many public sector workers would be better off in Scotland.
He told the Scottish Labour leader: “A band six nurse at the bottom of the scale will take home an additional £1,994 after tax compared to the same band in England.
“A qualified teacher at the bottom of the band will take home £6,365 more after tax in Scotland than the equivalent in England. There are the facts for Mr Sarwar.”
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