Chancellor Rachel Reeves is preparing to deliver one of the most scrutinised budgets in recent memory as she looks to close a widening £50 billion hole in Britain’s public finances.
With weak productivity, high inflation, and rising debt costs squeezing fiscal room, the government is weighing tax rises and spending cuts to restore stability while keeping investment flowing into growth sectors.
The autumn statement, set for 26 November, comes as ministers try to steady the post-Brexit economy.
The Guardian reports that Reeves said both tax and spending are under review, but emphasised that “the numbers will always add up,” citing the turbulence that followed the Liz Truss mini-budget three years ago.
Economists say the government must now strike a delicate balance between fiscal credibility and economic momentum.
Impact of Brexit and fiscal drag on growth
According to the Guardian, Reeves attributed part of the shortfall to the “lingering impact” of Brexit, austerity, and earlier market shocks.
Reeves said people thought the UK economy is roughly 4% smaller than it would have been without Brexit, leading to lower productivity and trade activity.
To offset some of that loss, the government is strengthening EU ties through new cooperation on food, farming, energy trading, and youth mobility.
Ministers have prioritised deepening these links to help British exporters and investors reconnect with Europe’s largest market.
The chancellor has described this effort as “undoing the damage” while maintaining fiscal discipline at home.
The Office for Budget Responsibility (OBR), however, is expected to downgrade productivity forecasts, further tightening the financial outlook.
Planning reform at the heart of economic recovery
The Guardian notes that beyond balancing the books, Reeves has staked her fiscal strategy on “getting Britain building.”
She plans to fast-track major infrastructure projects through a planning and infrastructure bill, calling it “probably the biggest piece of legislation this parliament will pass.”
The bill will overhaul judicial review timelines and simplify complex approval procedures, including assigning specialist judges to expedite cases.
One example is the Lower Thames Crossing, a project whose planning file reportedly exceeds 350,000 pages—longer than the complete works of Shakespeare.
Reeves said such red tape has slowed national growth and investment for decades.
By prioritising construction, she hopes to create jobs and stimulate demand without resorting to large borrowing programmes.
Balancing fiscal discipline with growth ambitions
While the government points to encouraging signs—such as the UK being the fastest-growing G7 economy in the first half of the year and a pickup in business investment—Reeves faces difficult decisions.
Her U-turn on winter fuel payments and reversal of welfare cuts have already widened the deficit by £6 billion, compounding the larger shortfall.
As per the Guardian, Reeves has refused to rule out immediate tax rises, warning of a “doom-loop” where low growth limits revenue and forces further tightening.
She insists sustainable expansion remains the only lasting path to lower taxes and stronger public services.
As pressure mounts, the chancellor’s challenge will be to convince both markets and households that fiscal restraint and long-term investment can coexist in an economy still recovering from the shocks of austerity, Brexit, and inflation.
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