UK Budget 2025: Choices and Consequences
Today Rachel Reeves gave her second Budget as Chancellor. It was a moment of ultimate political risk and a Budget straining under the weight of expectations. The cheers from Labour backbenchers told their own story and, for now, the Chancellor has bought herself some breathing space. After months of leaks, hints and counter-briefings, Reeves delivered what may well be the most trailed Budget in modern times while more than doubling her fiscal headroom.
But one question remains: Has she has done enough to quiet her critics and chart a credible path back to economic strength?
At a glance:
- Chancellor Reeves says Budget will set “strong foundations for a secure future.”
- Growth forecast is up, but productivity growth is down, as OBR says Budget will meet fiscal rules.
- Income tax thresholds are frozen as a Mansion Tax is introduced alongside changes to savings and pensions tax benefits.
- Labour MPs are pleased by cost-of-living policies including freezing fuel duty, rail fares, prescription charges and reducing energy bills alongside an increase to the National Living Wage and abolition of the two-child benefit cap.
Read our P&GA UK team’s Budget report for a deep dive into the political fallout from the Budget and the main measures it contains.
