Reeves to target black hole of over £25bn in Budget

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

UK chancellor Rachel Reeves is to target a fiscal hole of more than £25bn in her Budget this month, as she looks to patch up the NHS and Britain’s ailing public services.

The £25bn number is significantly more than the £22bn the government previously said affected this year’s public finances.

It points to larger-than-expected tax rises in the October 30 Budget as the government seeks to raise enough money to show tangible improvements in the services provided by the NHS.

“Just to fill the £22bn black hole that we’ve identified would mean public services just about standing still,” said one government insider.

Another said that Reeves would need to raise well in excess of £25bn to rebuild the NHS and other public services.

Reeves briefed cabinet colleagues on her Budget thinking on Tuesday, ahead of submitting her final proposals to the Office for Budget Responsibility, the fiscal watchdog, on Wednesday. 

She is understood to have told cabinet: “The Budget will be about protecting working people, starting to fix the NHS and rebuilding Britain. We cannot turn around 14 years of damage in one Budget, but we can start to deliver on our promise of change.”

This is a developing story