London (Brussels Morning Newspaper) – British Chancellor of the Exchequer Rachel Reeves set the stage for further tax increases in a speech on Tuesday, accusing the previous Conservative government and global trade tensions of damaging the UK economy to shield the country from high inflation and rising interest rates.
Finance minister Rachel Reeves, in a pre-budget speech, said the UK had faced increasing challenges since her first budget last year. The chancellor also stated her commitment to reducing inflation to enable further interest rate cuts, while maintaining control over the government’s debt levels and borrowing expenses.
The Budget this month will focus squarely on the priorities of the British people: cutting waiting lists, cutting the national debt and cutting the cost of living.
— Rachel Reeves (@RachelReevesMP) November 4, 2025
Today I will set out the choices our country faces and the values that will guide my decisions.
What challenges does the UK economy currently face?
She stated on Tuesday that earlier policies concerning austerity, Brexit, and pandemic management have resulted in a more negative legacy than initially believed.
The chancellor mentioned that these challenges encompassed ongoing tariff threats, which discouraged investments and restrained growth. Additionally, she noted that inflation had decreased too slowly and that global borrowing costs had increased.
“Years of economic mismanagement has limited this country’s potential,”
the chancellor said in the televised speech.
“At the budget last year, I fixed the foundations, dealing with the aftermath of Liz Truss’s disastrous budget,”
Reeves also said,
“But since that budget, the world has thrown even more challenges our way.”
How does Reeves plan to balance growth and fairness?
Reeves reaffirmed her dedication to the UK’s “iron clad” fiscal regulations.
“No accounting trick can change the basic fact that government debt is sold on financial markets,”
Reeves said.
She also stated she would take necessary actions—regardless of popularity—to shield the country from high inflation and rising interest rates.
Reeves said her annual fiscal update would be
“for growth with fairness at its heart, and a budget that supports businesses to create jobs and to innovate.
“As I take my decisions on both tax and spend, I will do what is necessary to protect families from high inflation and interest rates,”
she stated, adding this would be
“to protect our public services from a return to austerity and to ensure the economy that we hand down to future generations is secure with debt under control.”
How was Rachel Reeves’s last year’s budget speech in 2024?
On the other hand, in her 2024 Budget address, Rachel Reeves placed emphasis on investment as the driver of economic growth, using the slogan invest, invest, invest throughout the speech.
She also referred to the OBR’s forecast of a 1.1% growth rate for 2024 and a forecast of 2% for 2025. She again emphasised that a Labour government would restore economic stability, to turn the page on the last 14 years of Conservative rule, and put more money in your pocket.
