Reeves says she is looking at tax rises ahead of Budget

Rachel Reeves has said she is looking at raising taxes again at her autumn Budget next month.

The chancellor also said she was considering further measures on public spending, in a bid to put the UK's finances on a firmer footing.

Speaking to broadcasters ahead of an international finance summit in the US, she added that she would "continue to prioritise economic and fiscal stability".

The Budget in November is the moment when the chancellor outlines the UK government's plans for the economy.

Reeves is widely expected to raise taxes at the Budget on 26 November, after poor economic figures and a series of U-turns on welfare cuts made it harder to meet its self-imposed spending rules.

Some analysts have estimated that the chancellor will have to increase taxes or cut spending to fill a hole in the public finances, estimated to be £20bn-£30bn.

Reeves received the Office for Budget Responsibility's (OBR) forecast of the economy on 3 October.

It is likely that in the weeks before the Budget, as Reeves learns more about how much money she needs to raise and makes decisions about how to do it, she and other ministers will become more explicit still about the direction of travel.

Speaking to broadcasters in Washington DC ahead of the the International Monetary Fund (IMF) annual meeting, the chancellor said: "I've always been very clear that we will continue to prioritise economic and fiscal stability in the UK."

Asked whether she would have to raise taxes at the Budget, she replied: "As we get the forecast, and as we develop our plans, of course we are looking at further measures on tax and spending, to make sure that the public finances always add up."

Speaking to the BBC earlier, Chief Secretary to the Treasury James Murray said he wouldn't speculate on what might be in the Budget.

"The chancellor makes all her decisions on Budget day on 26 November and sets out her package there," Murray said.

"Yes, a budget focuses on tax and spend and we'll set out how we're keeping a tight grip on public spending."

The additional suggestion of spending cuts by Reeves is intriguing - many Labour MPs believe that spending cuts in most areas would be politically unviable after the failed attempts at welfare cuts earlier this year, although the government could promise to cut spending in four or five years.

In an interview earlier, Reeves told Sky News the effects of Brexit, austerity policies and former Prime Minister Liz Truss's mini-budget had damaged the UK economy.

Sky News reported that when asked how she would deal with the country's economic challenges, Reeves said: "Now, of course, we are undoing some of that damage by the deal that we did with the EU earlier this year on food and farming, goods moving between us and the continent, on energy and electricity trading, on an ambitious youth mobility scheme, but there is no doubting that the impact of Brexit is severe and long-lasting."

In her speech to Labour conference last month, Reeves said the government was facing difficult choices and promised she would not take risks with the public finances.

The chancellor pledged to keep "taxes, inflation and interest rates as low as possible".

Labour promised in its 2024 manifesto ahead of last year's general election not to increase taxes on "working people", saying the party would not "increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT".

On Monday, the International Monetary Fund (IMF) said the UK was set to be the second-fastest-growing of the world's most advanced economies this year.

But the IMF also predicted the UK will face the highest rate of inflation among G7 nations both this year and next, driven by rising energy and utility bills.

Shadow chancellor Sir Mel Stride said needed to get a grip on public spending, rather than raise taxes again.

He said: "Be in no doubt, this tax doom loop is down to the Chancellor's economic mismanagement.

"Under Rachel Reeves we have seen inflation double, debt balloon, borrowing costs at a 27-year high, and taxes up - with more pain on the way in the autumn."