Rachel Reeves has confirmed that tax rises and spending cuts are on the table as the Budget approaches, with the Chancellor looking to plug a financial black hole of up to £50bn. Ms Reeves, who attributed the economic challenges to Brexit and warned that the departure from the EU has had a “severe and long lasting” impact, confirmed that she will look at a range of “tax and spending” measures in the Budget. Asked whether higher taxes on the wealthy would feature, the Chancellor said it would be “part of the story” of the Budget. The National Institute of Economic and Social Research estimates that the Treasury will need to find around £50bn a year by 2029/30 to meet the Chancellor’s goal of balancing day-to-day spending with tax revenues while maintaining “headroom” of around £10bn against that target. Asked if the Government is in a “doom loop” of having to hike taxes to fill fiscal gaps, Ms Reeves told Sky News that “nobody wants that cycle to end more than I do.” James Murray, the chief secretary to the Treasury, said that ministers stand by a manifesto promise not to raise income tax, VAT or National Insurance but told BBC Breakfast it was “normal” for a Budget to look at options around tax and spending.

Scottish businesses are facing significant financial pressure as UK inflation is projected to rise sharply, according to the International Monetary Fund (IMF). The IMF’s latest report indicates that inflation could average 3.4% in 2025, up from previous estimates. Guy Hinks, chairman of the Federation of Small Businesses (FSB) Scotland, said: “Many firms won’t have any choice but to put up their own prices.” The Scottish Retail Consortium and the Scottish Chambers of Commerce echoed these concerns, highlighting the challenges of absorbing rising costs. Retailers, it is noted, are struggling to maintain prices amid increasing operational expenses.

The Chancellor is considering lifting the cap on Enterprise Management Incentives (EMIs) in the Budget, a move that would provide substantial tax breaks for small businesses. Currently, the EMI cap is £250,000 over three years for firms with assets under £30m and fewer than 250 employees. A Treasury source has indicated that the new cap could be significantly higher. EMIs allow smaller companies to offer share options to employees with no income tax or National Insurance liabilities. In 2022/23, the scheme cost the Exchequer £670m.

In the second quarter of this year, small to mid-sized businesses (SMBs) in the UK experienced a 0.2% decline in revenues, ending four quarters of growth. However, Sage’s Small Business Tracker shows that profit growth for UK SMBs reached 3.7%. While this was down on Q1, it exceeds the rate recorded over the last two years. Business expenditure fell by 2.9%, with this the first decline since early 2024.

Young Brits, particularly Gen Z, are aiming for early retirement at 60, according to a report by Standard Life. However, only 13% prioritise pension savings, with many relying on auto-enrolment for their retirement funds. Catherine Foot, director of the Standard Life Centre for the Future of Retirement, said: “Their aspirations and approach to saving may not match the financial realities ahead.” Additionally, nearly 50% of 18-28 year olds are willing to take greater investment risks, with a quarter investing in volatile cryptocurrencies.

The International Monetary Fund (IMF) has warned that global government debt could exceed 100% of GDP by 2029. In its Fiscal Monitor report, the IMF highlighted the risks of excessive borrowing, saying: “The persistence of spending above tax revenues will push debt to ever higher heights threatening sustainability and financial stability.” The UK is among the nations projected to breach this threshold, struggling with a debt exceeding £3trn, which has led to increased interest payments.

The International Monetary Fund (IMF) has cautioned Chancellor Rachel Reeves against limiting the Office for Budget Responsibility’s (OBR) authority. Ms Reeves had suggested that the IMF supported a single annual forecast from the OBR but Victor Gaspar, the IMF’s head of fiscal affairs, has said that multiple economic evaluations annually are “best international practice.”

Rachel Reeves is reconsidering a reduction in the cash ISA allowance ahead of next month’s Budget. Previously, the Chancellor paused plans to cut the £20,000 limit after significant pushback from financial institutions. Reports suggest she may now propose halving the cash allowance to £10,000, while maintaining the full limit for stocks and shares ISAs. Some industry experts are pressing Ms Reeves to implement broader reforms. Tom Selby from AJ Bell said: “The current fragmented market is overly complex,” advocating for a simpler product structure. Critics argue cash ISAs hinder long-term wealth creation, with Michael Healy from IG calling them “pernicious.”

Waymo plans to launch its robotaxi service in London next year, following the Government’s expedited regulations for fully driverless vehicles. It would mark Waymo’s first entry into Europe after successful operations in the US and a pilot in Tokyo. The Government aims to facilitate the launch through a pilot scheme allowing limited robotaxi services without a safety driver.