Will our fiscal psychodrama never end?
I’m sure it wasn’t always like this. There was a time, really not that long ago in the grand scheme of things, when trying to predict the contents of an upcoming Budget was limited to dedicated policy wonks and Westminster’s most dogged journalists. These days, fiscal speculation is a major occupation for several months of [...]
Predicting the contents of an upcoming Budget is no longer limited to policy experts and journalists. In modern times, fiscal speculation dominates several months each year. The recent Covid pandemic has made Budgets even more critical, and this trend has continued under the Labour government led by Keir Starmer. In 2024, Starmer warned of a dire economic outlook for the autumn, which was subsequently confirmed by Rachel Reeves, who announced £40 billion in tax increases.
Reeves followed up with another £20 billion in the following year when the economy faced a slowdown. Andy Burnham and John Healey are set to present their Budgets, aiming to do so sooner rather than later, with the upcoming one being four weeks earlier than last year's. They claim they will not indulge in speculation, acknowledging the potential harm caused by businesses reacting to anticipated announcements.
However, with fiscal credibility at a low point and borrowing costs being unacceptably high, next month's event is expected to mirror the drama of the previous two Budgets, despite Healey's pleas for calm. The atmosphere is tense due to the prospect of tax hikes, and the Treasury remains tight-lipped, refusing to engage with speculation.
As long as the stakes remain so high, each Budget becomes a feat of contortion and survival, with persistent issues like welfare spending and debt continuing to worsen.
Written by urgent.news from City AM's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
