Chancellor Rachel Reeves has delivered her second budget, in which she raised taxes by £26 billion. This will take the UK tax burden to an all-time high of 38% of GDP by 2030-31. But it will also more than double Reeves’ “fiscal headroom” to £22 billion.
This fiscal headroom – effectively Reeves’ spending buffer – is up from the previous £9 billion, giving the government more flexibility to increase spending or reduce taxes without jeopardising stability.
