Chris Mason
Political editor

It is more than half a century since a chancellor of the exchequer chose to put up the basic rate of income tax - that was Labour's Denis Healey, who delivered his Budget on 15 April 1975.

Not once since have any of his successors done the same thing.

Five decades later, could Rachel Reeves change all of that in three weeks time?

That was one of the big questions hovering over Downing Street as us reporters headed in almost before dawn for the chancellor's breakfast time speech and news conference.

Tradition dictates that three weeks out from a Budget the air is full of every conceivable voice but the chancellor's. But not this time.

Why?

You can pick your expression of choice: softening up, expectation management, pitch-rolling. They all translate as preparing us for unpopular choices to come.

Reeves volunteering to commandeer the broadcasting apparatus of Downing Street – the specially built news conference room in No 9 – tells you everything about the scale of what she is toying with at the end of the month.

Well, I say everything, not quite. The actual choices, the decisions, including which taxes will go up and by how much, will come at the end of the month.

• Read Chris Mason's full article here

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Freya Scott-Turner
Live reporter

Image source, Reuters

It's a week that typically sees chancellors keeping a low profile, as they make their final, private, decisions on the Budget.

But Rachel Reeves has taken the unconventional step of delivering a pre-Budget speech to a room packed with journalists eager to glean any hints of what is to come.

The speech saw her pledge a Budget for growth with "fairness at its heart", that would make "the choices necessary to deliver strong foundations for the economy" and mitigate a world that has "thrown more challenges our way".

The one thing she didn't do was rule out tax rises.

The chancellor refused to get into the specifics, but left no doubt that taxes are indeed going up, says our chief political correspondent Henry Zeffman. While deputy economics editor Dharshini David says Reeves used the speech to pin the need for forthcoming tax rises on the actions of previous governments.

Tory shadow chancellor Mel Stride dubbed it an "emergency speech from a chancellor panicking about the speculation she has fuelled", while the Liberal Democrat's Daisy Cooper dismissed it as "pointless".

Attention is now fixed on 26 November, when that speculation will be put to bed once and for all.

We'll soon be ending our live coverage, but you can keep up with the latest on our website:

• Read the full write-up from our business and politics correspondents

Rachel Reeves has again been asked about Labour's manifesto commitments on tax, in the light of her pre-Budget speech.

As a reminder, Labour pledged not to raise income tax, VAT or National Insurance in its general election manifesto.

A spokesman for the chancellor told reporters: "Those manifesto commitments were made because we recognised that working people had been asked to pay the price of 14 years of Conservative failure."

When these concerns were put to PM Starmer spokesperson said: "We'll do whatever is necessary to protect families from high inflation and interest rates, protect our public services and guarantee the investment necessary for our economic future."

Image source, PA Media

Image source, PA Media

We can bring reaction from Green Party Leader Zack Polanski.

Rachel Reeves' speech "was clearly looking to prepare the nation for tax rises" he says.

"Any measures that look to balance the books on the backs of some of the most vulnerable... will be the mark of economic, social and environmental failure," he continues.

Polanski calls for the 26 November Budget to be "a cost-of-living Budget".

"That's a moral imperative," he says.

Image source, EPA/Shutterstock

Rachel Reeves' speech today was all about laying the ground for her upcoming Budget. But when is that?

The chancellor will deliver her Budget speech at 12:30 on Wednesday 26 November. MPs will then debate the measures for four days before voting on them.

Any approved tax changes in the Budget can come into effect immediately.

The Autumn Budget will also include big decisions about spending on public services such as health, schools and police.

The Institute for Fiscal Studies (IFS) says Reeves will "almost certainly" have to raise taxes to make up what it estimates will be a £22bn shortfall in the government's finances.

In her speech today, Reeves did not rule out tax rises as she said she would make the "necessary choices".

There's plenty of tax changes that could feature, from income tax and National Insurance to higher taxes on gambling firms and overseas retailers.

However, Labour pledged not to hike income tax, VAT or National Insurance in its general election manifesto.

What's driving long-term borrowing costs?published at 12:28 GMT 4 November

12:28 GMT 4 November

By Ben Chu, BBC Verify policy and analysis correspondent

In her speech this morning Chancellor Rachel Reeves said borrowing costs have gone up around the world since her Budget last year.

The UK has the highest 30-year sovereign borrowing costs in the G7 group of industrialised nations at 5.17% today, according to data from Bloomberg.

That's up from 4.82% on the day of the last Budget on 30 October 2024, an increase of 0.35 percentage points.

However, that's not the biggest increase in the G7 over that period – as 30-year borrowing costs have risen by more in Japan (0.86 percentage points), France (0.64 percentage points) and Germany (0.61 percentage points).

The reasons why the UK has higher long-term market borrowing costs than peer countries are not clear.

Some financial market analysts attribute it to higher and more persistent consumer price inflation in the UK than other nations in the G7 in recent years, which could put pressure on the Bank of England to keep its own interest rate higher for longer.

Others attribute it to the Bank of England selling its UK sovereign bonds – purchased in the years after the 2008 financial crisis to support the economy – more rapidly than other central banks.

Some analysts suggest it could be the legacy of the 2022 mini-budget during Liz Truss' time as prime minister that first pushed up UK long-term borrowing costs relative to the rest of the G7.

And others , externalthink the proven political difficulty of UK governments in cutting spending could also be a factor, external.

But there is no consensus on the reasons.

Economist Paul Johnson says it was an "odd speech from the chancellor".

Posting on X, the former director of the Institute for Fiscal Studies said: "In one sense fair enough to blame last government for problems.

"But wrong to pretend all utterly unexpected and couldn't possibly have been predicted at election or budget last year.

"We knew the risks when tax promises were made. And so did she."

At the last election, the Labour manifesto said the party would not put up income tax, VAT or national insurance.

We have been hearing from members of the public on possible tax rises at the upcoming Budget on 26 November.

Harry is an NHS doctor working 46 hours a week. He is due to become a consultant in the next 12 months, but says he will no longer qualify for nursery funding for his son once he achieves the promotion, as the starting salary for the role is over the £100,000 free-childcare cap.

"Once I'm over that [£100,000] bracket, I'm majorly disincentivised to go to work... So when I take up a consultant post, I’m probably going to work part time," he tells Nicky Campbell on BBC Radio 5 Live.

We also heard from Steven, a plumber and small business owner in Epping. He says there is no incentive to grow his business at the moment as it could push him over the VAT threshold.

Businesses have to register for VAT if their VAT-taxable turnover is more than £90,000.

"I withhold services towards the end of the tax year because of the VAT threshold," Steven says. He adds that "a lot" of sole traders and small businesses "don't want the hassle of being VAT registered".

If the government raised the threshold to £120,000-£150,000, he says he would "happily take on another trainee" and grow his business.

Tommy Lumby
BBC business data journalist

The pound continued to fall against the dollar after Reeves’ speech and remains at levels last seen more than six months ago, as the chart below shows.

However, analysts say this is partly to do with the dollar’s rising value.

Key measures of UK government borrowing costs also fell after the Chancellor took to the lectern but have since risen slightly above their position pre-speech.

Speaking to Radio 4, Luke Hickmore of Aberdeen Investments said bond markets, where the government borrows, were “laser-focused on costs coming down and revenue rising”.

He said the markets would take “comfort” from hints of tax rises but added that Reeves hadn’t said as much about plans to cut costs.

What would tax rises mean for Scotland?published at 11:22 GMT 4 November

11:22 GMT 4 November

Douglas Fraser
Business and economy editor, BBC Scotland

If taxes are on the way up, how would that play differently in Scotland, with some taxes devolved but most of them still controlled from Westminster?

If it's VAT or National Insurance being changed, that would apply in Scotland and across the UK. But income tax is different. Westminster only controls the personal allowance for income tax, which is the same as the starting threshold.

There are five income tax bands in Scotland. Thresholds for those bands and rates of income tax at each band are for the Scottish government to set. For above average earners, they're currently higher than the rest of the UK.

So, if there's to be a rise in Westminster income tax rates, that can be expected to bring in more revenue (though that's not guaranteed). The Treasury then adjusts the block grant it pays Holyrood, by calculating the amount of tax it would have raised if it still collected income tax from Scots.

If it would have raised more tax as a result of a Rachel Reeves tax increase, that deduction gets bigger. Shona Robison, the Scottish finance secretary, would therefore have a smaller block grant.

To replace the bigger hole in the Scottish budget, she would have to increase tax by roughly the same amount by which it's been reduced.

Which taxes could Reeves put up?published at 11:10 GMT 4 November

11:10 GMT 4 November

By Anthony Reuben

It seems likely from this morning’s speech that Chancellor Rachel Reeves is planning to raise taxes, but she carefully avoided giving any details about which ones could go up.

Her problem is that if she needs to raise substantial amounts of money the easiest way to do so would be to increase one of the big revenue raisers: income tax, National Insurance or VAT - but Labour’s general election manifesto last year promised not to do that.

Putting 1p on the basic rate of income tax, for example, would raise £7bn or £8bn a year, according to the government’s calculations, external. Putting 1p on the higher rate would raise about £2bn a year.

If the chancellor is ignoring the three biggest revenue raisers the next four biggest are corporation tax, council tax, business rates and fuel duties.

The Institute for Fiscal Studies think tank said, external that raising tens of billions of pounds in taxes without breaking Labour’s manifesto pledges would be “difficult, but not impossible”. But it warned that “many of the tax-raising options outside the ‘big three’ would have particularly damaging effects on growth and welfare”.

How do UK death rates and debt compare to other countries post-pandemic?published at 11:05 GMT 4 November

11:05 GMT 4 November

By Nicholas Barrett

Chancellor Rachel Reeves said in her Downing Street speech this morning that “after the pandemic the UK had higher death rates and higher debts than its peers”.

Analysis by the BBC has shown that in the three years to February 2023, the rate of deaths in the UK went up by more than 5%, which was more than France, Germany and Spain - all up between 3% and 4.5% - but less than Italy's figure of more than 6%.

The US and eastern European countries like Poland were harder hit with death rates more than 10% above their pre-pandemic levels.

The King, external’, externals Fund think tank has said, external “excess mortality in the UK during the pandemic exceeded that of most comparable western European countries”.

According to the International Monetary Fund, external by 2022 the UK’s debt amounted to 99.6% of GDP. At the time, this was lower than France (111%), Italy (138%) and Japan (248%).

In fact, with the exception of Germany (64%), the UK’s debt as a percentage of GDP was lower than all other G7 countries at the end of the pandemic.

Alex Emery
BBC News

We've been hearing from readers about how they think the Budget could affect them.

Matt Cooper, who runs a small business that provides educational courses on mountain safety, says that every time he switches on the news it seems there's another tax on the public which is making it tough for companies like his.

"More tax rises will halt my plan of growth," he says.

"I'm not a Conservative voter, but it felt like the economy was in better hands before, as it just feels like there's new taxes all the time."

As a reminder, you can get in touch with us about how you think Reeves's Budget plans might affect you.

Key economic points from the chancellor’s speechpublished at 10:47 GMT 4 November

10:47 GMT 4 November

Faisal Islam
Economics editor

Away from speculation about tax rises, there were some important economic points in the chancellor’s speech.

First, while respecting the Bank of England, she seemed to push the case for further rate cuts.

“Interest rates... have now been cut five times, but at 4% they are still a constraint on business borrowing and a burden on family finances,” she said.

In an already unusual speech, to do this two days before the Bank decides on rates is noteworthy.

The chancellor is sensitive to the independence of Britain’s economic institutions, and she said her Budget will focus on getting inflation down, to help create “the conditions for interest rate cuts to support economic growth and improve the cost of living.”

The Bank is not widely expected to cut on Thursday, but they will consider the case. A cut in December is looking more likely.

She also confirmed that the change to the Office for Budget Responsibility’s (OBR) assumptions about Britain’s long term economic performance, measured by economic output per hour worked, or productivity, would be the biggest single moving part in the Budget maths.

As we’ve previously reported, a downgrade to the UK's productivity performance from the government's official forecaster could lead to the chancellor facing a £20bn hole in government finances.

We can bring you a bit more from Kemi Badenoch now, who's just called Reeves' pre-Budget speech "a laundry list of excuses".

She accuses Reeves of delivering "a masterclass in managed decline" that left business leaders and investors "confused" because "Labour doesn't have a plan to get Britain working".

Conservative Party leader Kemi Badenoch is responding to Rachel Reeves' speech now, calling it "one long waffle bomb".

"The chancellor's speech was one long waffle bomb, a laundry list of excuses. She blamed everybody else for her own choices, her own decisions, her own failures," she says.

The chancellor's speech is clear: "don't bother" living within your means "because the government won't".

The Budget is an "opportunity to fix this", to make savings and take the pressure of all of us, says Badenoch.

Image source, Reuters

We're starting to get some reaction through now to Rachel Reeves' pre-Budget speech.

Tory shadow chancellor Mel Stride calls it an "emergency speech from a chancellor panicking about the speculation she has fuelled".

The speech has confirmed "the fears of households and businesses - that tax rises are coming." He adds that if Reeves "breaks her promise and hikes taxes again, she must go."

We've also heard from Daisy Cooper, Treasury spokesperson for the Liberal Democrats and the party's deputy leader: "That wasn't pitch rolling, it was pointless".

"This Budget will be a bitter pill to swallow," she says, adding that "the government seems to have run out of excuses".

Can the cost of living go down while taxes go up?published at 09:38 GMT 4 November

09:38 GMT 4 November

Kevin Peachey
Cost of living correspondent

Reeves’ talk of productivity and national debt might not cut through to people worried about the cost of the supermarket shop and their winter energy bill.

The prospect of tax rises and the promise of cutting the cost of living certainly will. But how can she do both?

There were no specifics in this speech. But the chancellor gave plenty of hints – how “each of us must do their bit”, and how she wants to bring down the rate of inflation to pave the way for interest rate cuts.

The detail, she says, will come in the Budget. Which groups of people will be targeted with each policy will be key.

In other words, who will take the hit and who will get the benefit? In truth, we don’t yet know.

But it is not simple. For example, cutting VAT on energy bills would help family budgets. Some vulnerable people who have to stay at home with the heating on would benefit more, but so would richer people with bigger homes.

Image source, PA Media

Chancellor Rachel Reeves has - in her words - set the "context" for widely anticipated tax rises in her 26 November Budget by listing the challenges facing the UK economy, while pledging to prioritise national interest over "political expediency".

Just catching up? Here's what you need to know:

• Are taxes going up? Reeves consistently refused to rule this out, or detail which taxes might rise and by how much. As our chief political correspondent Henry Zeffman points out: "If there was any glimmer of doubt about tax rises before this speech, there isn't now"
• 'A growth Budget, with fairness at its heart'. Instead, Reeves said she was refusing to sweep economic pressures "under the carpet", and repeatedly pledged to hit those key Labour priorities: cutting NHS waiting lists, national debt and the cost of living
• 'Each of us must do our bit'. We all have contribute if we want to overhaul the country's economic health, the chancellor argued - fuelling speculation that Labour will break its manifesto pledge not to raise income tax
• Tories and global shocks take blame: In illustrating the gloomy economic picture in the UK, Reeves went several times for the policies of the previous Tory government. She also said that, since the last Budget, the world has "thrown more challenges our way", including tariffs and lingering inflation
• A warning: She also urged against over-reliance on borrowing, saying government debt stood at £2.6tn - or 94% of the national income