New Government in the UK to Unveil First Budget: Tax Hikes on the Horizon

In the UK, four months have passed since the Labour Party came to power, and the government is preparing to announce its first budget today. This budget stands out as a financial plan expected to attract significant interest from economists, containing some "painful" decisions. Leaders emphasize that priorities will be set to support economic growth, with expectations of substantial tax increases and cuts in certain areas.

Amanda Tickel, head of the tax and trade policy department at Deloitte UK, highlighted in a statement to CNBC that Chancellor Rachel Reeves pointed out a significant budget deficit in the budget. Tickel indicated that measures are anticipated, including a tax increase of approximately £35 billion and spending cuts of £5 billion to address this deficit.

The impact of the budget could be extensive. Economists are eagerly awaiting how Labour leaders will balance tax increases and additional spending, predicting that this budget will have wide-ranging effects. The absence of a Labour government for 14 years in the past has made the changes in financial policies during this new period a focal point of interest.

Amanda Tickel noted that the new government wishes to make significant changes to the tax system. This new period, where the Labour Party aims to leave its mark, may also contain considerable transformations in tax policies. Tickel remarked, “This budget will be the first serious financial step taken 117 days after the Labour Party government came into office.”

The budget is expected to prioritize growth-oriented investments. Decisions made to encourage economic growth are planned to align with the country's long-term development goals. However, it is also stated that cuts in certain areas will be inevitable during this process.

Analysts highlight the economic challenges facing the UK, stating that the government aims to find solutions to structural issues with this budget. Financial adjustments made within the budget may pose difficulties for certain sectors in the short term, but it is anticipated that they will support economic growth in the long term.