The Chancellor will deliver the Autumn Budget to Parliament on 26 November 2025.
Party backlash
According to the latest press reports, Ms Reeves was forced to abandon a plan to raise Income Tax in the Budget after a backlash within the Labour Party over a measure that would have broken one of the government's manifesto pledges.
Reeves had previously informed the budget watchdog of plans to raise Income Tax – breaking one the pledge not to increase personal taxes.
However, Ms Reeves may now look at Income Tax thresholds instead as she looks at ways to raise tens of billions in revenue. According to the Resolution Foundation, extending the freeze in personal tax thresholds for two more years beyond April 2028 would raise £7.5 billion.
£26 billion needed
However, the think tank says that in order to maintain her fiscal headroom and allow spending on cost-of-living support in line the government's wider agenda on poverty reduction and prices, the Chancellor will need to make £26 billion in tax increases.
As personal taxes have been ruled out, the Foundation says Ms Reeves should level the playing field on tax with an equivalent of employer NI for at least some partnership income.
The Chancellor could also consider raising dividend tax and closing Capital Gains Tax (CGT) loopholes, reducing the VAT threshold and future-proofing the tax system – such as reforming Vehicle Excise Duty.
Not normal
However, in the wake of news that the Chancellor was dropping the potential increase to Income Tax, the bond markets reacted negatively, prompting the think tank to send Ms Reeves a warning.
'Much depends on the forecasts from the Office for Budget Responsibility (OBR),' said Ruth Curtice, Chief Executive of the Resolution Foundation.
'A significant economic deterioration would leave the Chancellor choosing whether to break the spirit or letter of her manifesto pledge on Income Tax. A more benign economic outlook will make it far easier to avoid breaking it at all.
'It is normal for economic forecasts and policies to change in the run up to the Budget. It is not normal for so much of that to be laid bare in public. The market moves this morning and in recent weeks suggest a serious look should be taken at the approach to market-sensitive forecast information.'
Whatever changes are made we will be watching and will provide detailed analysis of the day's announcements. Please return to this section following the announcement for a full analysis.