Budget 2024: Reeves ‘considering £40bn tax hikes and spending cuts’ – but falling inflation relieves pressure on Chancellor

Rachel Reeves is looking at making £40bn worth of tax rises and spending cuts in the upcoming Budget later this month, according to reports.

A government source told the Financial Times and The Times that the Chancellor is looking at the plans to avoid wider real-terms cuts to government departments.

Reeves is reported to have told ministers there would be “difficult decisions on spending, welfare, and tax” ahead – although she has repeatedly also said there would be no return to austerity.

Meanwhile inflation hit a three-year low in new figures today, falling below the Bank of England’s 2% target to 1.7% in the year to September – reducing the chances of potential further market pressure on the Chancellor to cut spending.

A Treasury spokesperson said: “We do not comment on speculation around tax changes outside of fiscal events.”

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