UK Budget 2025: Reeves Faces High Stakes as Economic Growth Falters
The UK Chancellor faces a critical test today, November 26, 2025, as she delivers a Budget against a backdrop of rising unemployment and sluggish economic growth. Speculation has been rife since Rachel Reeves presented her first Budget just over a year ago, and the pressure is now on to deliver a plan that can together appease markets, energize her party, and address the nation’s economic woes.
The stakes are undeniably high. Since the last Budget, unemployment has increased each month, while growth has steadily declined from 0.7 percent to 0.3 percent,and finally to 0.1 percent quarter-to-quarter. This downward trend underscores the urgency of the situation and the need for a bold and effective fiscal strategy.
On Monday evening,Reeves reportedly conveyed a steadfast message to Labor MPs,stating,”I will not let them beat me,” referring to both the media and the Conservative opposition. She further affirmed her commitment to future Budgets, declaring, “I’ll be there next year and I’ll be back the year after that.” whether this confidence is justified will hinge on her ability to navigate a complex set of challenges and deliver a Budget that exceeds expectations.
The Good, the Bad, and The Ugly
Analysts suggest the most effective way to assess the Chancellor’s statement is to categorize its components into three areas: the positive aspects, the negative consequences, and the potentially damaging outcomes.
The “good” news appears to center around potential incentives for new share listings. Reports indicate that stamp duty might potentially be scrapped for up to three years following an Initial Public Offering (IPO). While eliminating the tax entirely is considered a step too far for the Treasury – given its revenue generation of several billion pounds annually – suspending it for new listings is seen as a positive move that could strengthen the argument for its eventual abolition.
Further encouraging signs may emerge regarding infrastructure investment and planning reform. importantly, the absence of certain measures could also be viewed as positive. According to sources, there are no planned increases to income tax, no changes to the Limited Liability Partnership (LLP) structure, and no introduction of exit taxes.
Though, the “bad” news is expected to be readily apparent, manifesting in approximately a dozen tax increases impacting areas such as salary sacrifice schemes, tourism, and high-value properties.
The “ugly” aspects of the Budget are perhaps the most concerning. Fiscal drag,described as the most detrimental form of taxation,is highly likely to persist beyond the current parliamentary term,despite previous commitments from Reeves to address it. Furthermore,forecasts from the Office for Budget Responsibility (OBR) are anticipated to confirm a broadly pessimistic economic outlook.
One analyst noted,”The Chancellor may offer some positive surprises,but if the prevailing sentiment is simply that the Budget wasn’t as bad as feared,it will hardly be a cause for party.”
For in-depth analysis and live coverage, join the Budget day Live show from the heart of the Stock Exchange at 2pm today on CityAM.com and across social media channels.
