Chancellor Rachel Reeves has acknowledged she is considering tax rises and spending cuts ahead of her autumn Budget on 26 November.

Before the 2024 general election, Labour promised not to increase income tax, National Insurance or VAT for working people.

But the Institute for Fiscal Studies (IFS) says she will “almost certainly” have to raise taxes to make up a £22bn shortfall in the government’s finances.

The chancellor of the exchequer’s Budget statement outlines government plans for raising or cutting taxes. It also includes big decisions about spending on public services such as health, schools and police.

The statement is made to MPs in the House of Commons. It usually starts at about 12:30 UK time – after Prime Minister’s Questions – and lasts for about an hour.

The Leader of the Opposition, Conservative MP Kemi Badenoch, will give an immediate response. MPs will then debate the measures for four days, before voting on them.

There has been a lot of speculation that Reeves will have to raise taxes because she needs more money in order to meet her self-imposed rules for government finances.

She has two main rules, which she describes as “non-negotiable”:

• Not to borrow to fund day-to-day public spending by the end of this parliament
• To get government debt falling as a share of national income by the end of this parliament

The IFS said finding £22bn would allow the government to maintain the £10bn buffer it currently has, but argued there was a “strong case” for trying to increase it further.

The £10bn margin Reeves left herself after her Spring Statement in March was one of the lowest a chancellor has given themselves since 2010, with the average for the period standing at £30bn.

Income Tax and National Insurance (NI)

The government could extend the current freeze on income tax and NI thresholds, which is due to end in 2028.

Freezing the thresholds means that, as salaries rise over time, more people reach an income level at which they start paying tax or qualify for higher rates. This is often referred to as a “stealth tax”.

Speaking to the BBC in September, Reeves did not rule out extending the freeze.

The Resolution Foundation think tank – which has close links to some members of the government – believes some personal taxes will have to rise.

As part of a package of measures, it recommended cutting 2p from the employee NI rate, while adding the same amount to income tax.

Such a move would potentially affect pensioners, landlords and the self-employed more than workers. Their tax would increase but they wouldn’t benefit from a matched cut to NI.

Reeves has signalled that she is likely to focus on wealthy individuals, arguing “those with the broadest shoulders should pay their fair share”.

She may change the rules for limited liability partnerships (LLPs), which are sometimes used by high earning professionals such as lawyers and accountants.

Those who operate as LLPs are treated as self-employed and do not have to pay employers’ NI. The Times reported that changing this could raise £2bn.

Help with the cost of living

In October, Reeves told the BBC that she would take “targeted action to deal with cost of living challenges” while inflation remains high.

The BBC understands that the government could intervene to bring down gas and electricity bills. This could happen by reducing some regulatory levies currently added to bills, or by cutting the current 5% rate of VAT charged on energy.

The Sunday Times previously reported that it might fall to zero.

Property taxes

Reports suggest the government may reform property taxes. This could include replacing stamp duty – a tax buyers pay on properties above a certain value in England and Northern Ireland – with a property tax.

Landlords could have to pay more taxes, and council tax could be replaced.

Some people selling their main residence may have to pay capital gains tax.

Youth employment guarantee

In September, Reeves said that young people who have been out of work for 18 months will be given paid placements to help them secure full-time employment.

Isa reform

In July, the chancellor ruled out any immediate reform to cash Isas (Individual Savings Accounts). There had been speculation that she wanted to reduce the annual allowance to push people into investing in shares instead.

However, the FT has reported that she may announce a cut in the cash ISA limit from the current £20,000 to £10,000.

Pension changes

There has also been speculation about possible changes to pension rules, such as the level of tax relief available to savers and the size of the cash lump sum which can be withdrawn.

Cutting the higher rate tax relief on pension contributions would save the Treasury money, but may make pension savings less attractive.

Business taxes

The TUC, the umbrella group for trade unions in the UK, has called for higher taxes on online gaming companies and on banks’ profits.

In September, the chancellor told ITV News that “there is a case for gambling firms paying more”.

The Sunday Times reported that William Hill owner Evoke could close up to 200 of the chain’s betting shops in an attempt to stem losses, with the exact number being influenced by any changes to taxes on the sector.

Inheritance tax

In last year’s Budget, the government said that from April 2026, inherited agricultural assets worth more than £1m, which were previously exempt from inheritance tax, would be taxed at a rate of 20%.

In October, the Sunday Times reported that ministers were exploring changes to this, However, Farming Minister Dame Angela Eagle told the BBC’s Farming Today programme there was “no likelihood” of the policy being changed.

The Labour government says that boosting the economy is a key priority.

A growing economy usually means people spend more, extra jobs are created, more tax is paid and workers get better pay rises.

The UK economy has been slowing in recent months after a strong start to 2025.

The latest figures show that the economy grew by 0.1% in August, after a 0.1% contraction in July.

Over the three months to August, UK GDP grew by 0.3%, down from the 0.6% growth seen between March and May.

Meanwhile, government borrowing – the difference between public spending and tax income – reached £20.2bn in September. That was the highest level seen for the month in five years, driven by an increase in debt interest payments.

Prices are also still rising faster than expected.

Inflation held steady at 3.8% in the year to September, the same as in July and August, which was lower than expected, but still above the Bank of England’s 2% target.

In August, the Bank cut interest rates for the fifth time in a year, taking the cost of borrowing to the lowest level for more than two years.

It made the cut because of concerns that the jobs market was weakening, with data showing job vacancies were continuing to fall and wage growth was slowing.

However, the Bank held rates at its next meeting in September, arguing the UK was “not out of the woods” on inflation.

In October, the International Monetary Fund (IMF) forecast that the UK was set to be the second-fastest-growing major economy in 2025.

However, it also predicted that the UK will face the highest rate of inflation among G7 nations in both 2025 and 2026, driven by rising energy and utility bills.

Lloyds Banking Group has reported a 36% drop in its earnings for the third quarter as it felt the impact of an extra £800 million charge to compensate customers unfairly sold a car loan.

The bank reported a pre-tax profit of £1.2 billion between July and September.

This was more than a third lower than the £1.8 billion made over the same period last year, although it came in above the £1 billion profit that most analysts were expecting.

The group’s latest results take into account it setting aside more money to cover potential costs related to the UK regulator’s motor finance compensation scheme.

It took an additional £800 million charge over the third quarter, bringing its total compensation bill to an estimated £1.95 billion.

The Financial Conduct Authority (FCA) published proposals for a redress scheme after finding that payouts are due on around 14 million unfair car finance deals.

It calculated that each payout could average at about £700 per deal.

Lloyds’ finance chief William Chalmers said the bank was “concerned” about the watchdog’s proposed scheme which it thinks is “disproportionate” to the actual level of harm caused to consumers.

“We do think the proposals, as they stand right now, risk producing an anomalous outcome for customers, which is not a sensible place to be,” he said.

Mr Chalmers said the bank was hoping to have a “constructive dialogue” with the FCA and refused to say whether or not it could proceed with a potential legal challenge.

Lloyds said its lending has grown over 2025, including mortgages, credit cards and motor finance – with loans increasing by 4% across the first nine months of the year.

Current account and savings account balances also grew this year as its customers spent less and saved more.

Mr Chalmers said the trend reflected wage growth boosting its customers’ balances, as well as “patterns of probably slightly lower spend than previously”.

Chief executive Charlie Nunn said: “The group continues to perform well, demonstrating robust financial performance alongside strategic progress, including our recent acquisition of Schroders Personal Wealth.”

Mr Nunn said the bank benefited from income growth and cost savings “despite the impact of the additional motor finance charge in the third quarter”.

Mumbai: The Indian stock markets opened on a strong note on Thursday, even as global cues remained mixed.  

The benchmark indices, Sensex and Nifty, started the session with solid gains, driven largely by strength in IT stocks.

The Sensex opened 727.81 points higher at 85,154.15, while the Nifty reclaimed the 26,000 mark, opening 188.6 points higher at 26,057.20.

“For now, upside objective is set at 26186, with 26800 appearing as an optimistic objective,” market experts said.

“Meanwhile, downside marker is placed at 25780, but an outright reversal is not expected today,” they added.

Among the top performers on the BSE were Infosys, HCLTech, and Tech Mahindra, which saw healthy buying interest.

On the other hand, Bajaj Finserv, Maruti, and Power Grid were among the major laggards.

Similar trends were seen on the NSE, where Infosys, HCLTech, and Tech Mahindra led the gains, while IndiGo, Eicher Motors, and Sun Pharma Life witnessed selling pressure.

Broader market indices also traded higher, with the Nifty SmallCap 100 rising 0.33 per cent and the Nifty MidCap 100 climbing 0.44 per cent.

Sector-wise, the Nifty IT index emerged as the top gainer, up 1.84 per cent, while the Nifty Realty index was the only one in the red, slipping 0.08 per cent.

Analysts said that investors showed renewed optimism in the market, with strong buying seen in technology shares supporting the early trade momentum.

Reports of an imminent trade deal between India and the US is doing the rounds in market circles and the market reaction through Nifty implied open confirms this, experts said.

“Comments from President Donald Trump and responses from Prime Minister Narendra Modi indicate an early trade deal. The expected deal involves some concessions from both sides,” they added.

Meanwhile, the foreign institutional investors (FIIs) extended their buying streak for the fifth consecutive session on October 21, as they bought equities worth Rs 96 crore.