Rachel Reeves is expected to announce significant tax increases in the upcoming autumn Budget, according to Goldman Sachs economists. Although markets would respond more favourably to spending cuts, Sven Jari Stehn, chief European economist at Goldman Sachs, said politically they are harder to achieve. “We therefore expect significant tax increases which – given the limited historical success of tax-based fiscal consolidations – will likely keep UK fiscal concerns top of mind.” Meanwhile, Oxford Economics warned the economy remains “exceptionally fragile” and predicted that the Chancellor may need to tighten fiscal policy by around £30bn. “We expect the freeze on tax thresholds and allowances to be extended beyond fiscal year 2027-2028, with more narrowly focused tax hikes biting sooner,” Andrew Goodwin, the chief UK economist at Oxford Economics, said.

Rain Newton-Smith, the chief executive of the Confederation of British Industry (CBI), has urged Rachel Reeves to reconsider Labour’s manifesto pledge against raising taxes on working people. In an article for the Guardian, she said: “The time for tinkering is over” arguing that the economic landscape has changed significantly since the manifesto was drafted. She called for strategic tax reforms, including revisiting personal taxation and reforming business rates and VAT thresholds. The CBI also expressed concerns about the Government’s employment rights legislation, which may hinder hiring.

Pension savers are urged to remain calm as withdrawals surge ahead of the Budget on November 26. The Financial Conduct Authority reports that 211,000 individuals withdrew funds in the year to March 31, a 30% increase, totalling £18bn. Many over-55s are withdrawing to assist family or mitigate tax liabilities. Emma Sterland, chief financial planning officer at Evelyn Partners, called the trend “unprecedented.” Experts warn that hasty withdrawals could have long-term financial consequences. Meanwhile, the Telegraph reports that pensions experts such as Tom McPhail and Stephen Lowe have admitted that they are considering early withdrawals amid concern that Labour will cut the tax-free lump sum in the budget.

The Chancellor has cautioned Labour MPs against implementing a wealth tax, stating it could result in lower revenue for the Treasury. With a £50bn budget shortfall looming, pressure mounts from backbenchers and trade unions for a significant tax on the rich. But Rachel Reeves suggested that existing wealth levies, like inheritance tax, might be more effective. Experts warn that a wealth tax could prompt the wealthy to relocate their assets abroad.

Private capital firms are increasingly attracted to the UK, with 40% of investors viewing it as a prime investment location, according to the British Private Equity and Venture Capital Association (BVCA). Investment surged by 44% year-on-year in 2024, reaching £29.4bn. The BVCA urges the Government to enhance support, particularly through tax reforms, to solidify the UK’s position as a leading investment hub.

Lord Stuart Rose, former CEO of Marks & Spencer and Asda, has warned that Britain is “at the edge of a crisis” and called for urgent action to stimulate economic growth. His comments follow Ineos’s decision to halt investments in the UK due to Labour’s tax increases. Lord Rose told Times Radio: “If we don’t take some radical action…we’re going to find ourselves in a very difficult spot.” He expressed concern over the Government’s lack of direction and the potential impact of the Employment Rights Bill on job creation. “We laugh at the Europeans, we laugh at the restriction in working practices in Europe, we laugh at the French, but we are in a situation here where we’ve gone from having a very flexible labour force, we’ve had business which is very flexible, and we’re going to make it more difficult. I don’t understand the mentality of that. Why do that now? Why make it harder?”

The leader of the opposition has accused the Labour Government of leading the UK into an economic crisis marked by low growth and high spending. In a speech at the Institute of Chartered Accountants’ Hall, Kemi Badenoch urged Labour to prioritise welfare cuts over tax increases in the upcoming Autumn Budget. Badenoch stated: “The fundamental problem is our economy is being run by people who think it is government that creates growth. It’s not. It’s business that creates growth. We know that you cannot tax your way to growth.” She also pointed to a “crisis” in the bond markets and warned that the UK might be forced to go “cap in hand” to the IMF for a bailout. In a parliamentary session before MPs, the Chancellor blamed the Tories for Britain’s high level of debt and claimed the Government’s spending plans were “fully funded and fully costed”.

British workers have taken an average of almost two weeks off in sick days over the past year, the highest level in 15 years, according to the Chartered Institute of Personnel and Development (CIPD). The rise is attributed to long-term health conditions and an ageing workforce, with mental health issues being the leading cause of prolonged absences. Rachel Suff, senior wellbeing adviser at the CIPD, stated: “Long or repeated periods of sickness absence can make it difficult for organisations to plan their work.” The report also highlighted a widening productivity gap in the UK economy.

The Financial Conduct Authority (FCA) is set to challenge lenders claiming they lack records of mis-sold car loans. The move aims to ensure fair compensation from a potential £18bn fund for affected customers. FCA chief executive Nikhil Rathi said: “Where a firm says to us that they don’t have the data, we’re not just going to take that at face value.” The FCA said its consultation on the redress scheme will end in early October. It could cost lenders between £9bn and £18bn, with average payouts of up to £950 per claim. Giving evidence to MPs on the Treasury Committee, Rathi said: “It will be pragmatic, proportionate and fair to all sides.”

The Financial Conduct Authority (FCA) has raised concerns about financial firms excessively complying with Consumer Duty rules. Charlotte Clark, FCA’s director of cross-cutting policy and strategy, stated that this “gold plating” is not beneficial for consumers and adds unnecessary costs. She stressed the need for proportionality in compliance efforts. The FCA plans to simplify the rules to alleviate the administrative burden on businesses.