On Wednesday 26 November, Chancellor Rachel Reeves delivered her second Autumn Budget focusing on raising revenue through tax freezes and targeted levies, whilst increasing welfare support and minimum wage to address the cost-of-living pressures.
Against a backdrop of modest economic growth (forecast at 1.5%) and easing inflation, the Government has chosen to maintain frozen Income Tax and National Insurance thresholds until 2030/31, thus extending fiscal drag as a key revenue driver. New measures, including a High Value Council Tax Surcharge on homes over £2 million and a mileage charge for electric vehicles from April 2028, signal a shift toward broadening the tax base.
On the social front, the removal of the two-child benefit cap and an uplift in the state pension reflect efforts to tackle inequality and support vulnerable groups. The National Living Wage will rise to £12.71 per hour from April 2026, reinforcing the commitment to improving living standards. Public services benefit from a freeze on rail fares and an extension of the sugar tax to milk-based drinks, aimed at cost-of-living relief and public health.
Overall, the Budget highlights a long-term trend toward higher taxation which, is expected to reach 38% of GDP by 2030, while preserving fiscal headroom for future challenges.
More details of the specific measures can be found in our Budget Summary.
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