When the government was negotiating its trade agreement with the US, there was constant speculation that the digital services tax (DST), which is unpopular with American tech companies, might be watered down as a concession to the White House. That never happened. But today the Treasury has announced a review of the DST that suggests the government does expect it to eventually be replaced.

The review says:

The UK’s objective has always been to ensure that all businesses pay their fair share of UK tax, based on the value they derive from their UK activities, irrespective of where they are headquartered. The government understands that there is a lot of interest from stakeholders around the future of DST. As confirmed in the corporate tax roadmap, the DST remains an interim measure and the UK is committed to remove it once an appropriate global solution on the reallocation of taxing rights is in place.

Commenting on this, Daisy Cooper, the Lib Dem Treasury spokesperson, said:

If the government is preparing to slash taxes for the world’s richest man, Elon Musk, while hiking taxes for millions of British families, this would be nothing short of a scandal.

Rather than bowing down to Trump and his US tech barons, it’s about time the government asks those social media giants who are making billions in profit to pay their fair share.

Several UK betting companies have just announced that the budget will hit their profits.

British gaming company Rank Group says it expect a hit of about £40m to its annual operating profit from the UK’s tax changes which begin in April 2026.

Reminder, those changes include an increase in Remote Gaming Duty (“RGD”) from 21% to 40% and the abolition of Bingo Duty.

Evoke, the firm behind William Hill, 888 and Mr Green, has told the City that the higher taxes announced today will result in thousands of industry-wide job losses and increase customer activity on the betting black market.

Evoke estimates that the tax changes will increase its duty costs by approximately £125-£135m per year, and that it could mitigate half that cost through savings and retail store closures.

Entain, whose brands include Ladbrokes, Coral and BetMGM, says it is “disappointed by the increases to UK gambling taxes”. It predicts they will knock £100m off its earnings in 2026, and £150m from 2027.

Stella David, CEO of Entain, claims the tax changes are ‘punitive’:

“We are deeply disappointed by today’s decision to punitively increase UK gambling taxes, putting at risk an industry which already contributes £7 billion annually to the UK economy and supports over 100,000 jobs across the country.

Disproportionately increasing gambling taxes will not only have a detrimental impact on our industry but also heightens the risk for customers. As seen in other countries, punitive tax increases often lead to lower tax revenues overall, whilst also driving players to illegal, unregulated operators with no player protections. The Government must now urgently tackle the black market and the consequences of today’s decision.

Richard Fuller, the shadow chief secretary, has been on Radio 4’s PM programme, and he was asked to defend Kemi Badenoch’s claim that Rachel Reeves will go down as the worst chancellor Britain has had. Evan Davis, the presenter, suggested no one could be worse than Kwasi Kwarteng, who presented Liz Truss’ mini budget. Davis said that almost every measure that Kwarteng announced had to be reversed within days.

Fuller argued that, because the Kwarteng policies were instantly reversed, they did not cause lasting damage. He claimed Reeves’s decisions have caused lasting damage.

Lord Charles Allen, the chair of the British Horseracing Authority, paid tribute on Wednesday to “everyone who has played their part across the sport” following the budget announcement by the chancellor, Rachel Reeves, that the rate of duty for betting on horse racing will remain unchanged at 15%.

Confirmation that racing would be exempt from tax hikes on online casino gaming as well as betting on football and other sports follows a seven-month campaign under the slogan “Axe The Racing Tax”, which initially launched in response to a Treasury proposal to “harmonise” the duty paid on both betting and gaming at a single rate.

Instead, the chancellor opted for a new regime on gambling duty with a focus on online games of chance, which are associated with significantly higher rates of gambling-related harm than single-event betting. Remote Gaming Duty (RGD), the tax paid on profits from online slots and casino games, will effectively double, from 21% to 40%, and while the tax rate for online betting on sports other than racing will rise from 15% to 25%, there is no change to the rate on either machine gaming or sports betting in high-street shops….

More here:

Deutsche Bank analysts have spotted an interesting fact – this was the best Budget day for UK government debt, compared to German and American debt, in almost 20 years!

They report:

At first glance, the gilt market likes what it heard from the Chancellor today.

In fact, benchmarked relative to Bunds and US Treasuries, at the time of writing today marks the largest fall in 10y gilt yields on the day of a UK budget or major fiscal statement since 2006.

The decision to scrap the two-child benefit cap has been warmly welcomed by charities, thinktanks, anti-poverty campaigners and Labour MPs.

The Institute for Fiscal Studies says:

The abolition of the two-child limit will cost £3bn per year in 2029-30, benefiting 560,000 families with an average gain of over £5,300. This is one of the most cost-effective ways to quickly address child poverty, and the government estimate it will reduce child poverty by 450,000 in 2029-30. Children in families of three or more children had relative poverty rates of almost 44% in 2023-24, compared to 24% for those in smaller families, and the rise in child poverty seen over the 2010s was entirely driven by larger families.

And the Women’s Budget Group, another thinktank, says single parents will benefit in particular. Sara Reis, its interim director, said:

Lifting the two-child limit is a landmark step towards tackling child poverty in the UK. Our analysis shows that ending the two-child limit will lift over half a million children out of poverty by the end of the decade - restoring dignity, hope, and opportunity to hundreds of thousands of families.

This change will be particularly transformative for single parents, who make up more than half of the households hit by the policy, with the majority headed by women who are more likely to skip meals or get into personal debt to cover daily living costs. It also means an end to the horrific requirement on women to prove they were raped in order to qualify for the exemption. It’s encouraging to see the government listening to experts and taking the evidence seriously, ending a policy that has deepened hardship for the most vulnerable and punished children.

However, for some families this relief will be short lived when they find their income is still subject to the benefit cap, which limits the total amount of social security households can receive unless they earn the equivalent of 16 hours at minimum wage. For single parents, most of whom are women, balancing parenting and paid work is harder than for dual parent households so it is no surprise that they make up nearly 70% of families whose benefits are capped. Over half of capped single parent households have a youngest child under five years old.

Gordon Brown, the former Labour PM, says in a New Statesman article that Rachel Reeves has “done more to transform the lives of 450,000 of Britain’s poorest children than any of the seven previous Conservative chancellors, who, in 14 long years, did nothing but harm to the lives of vulnerable children”.

The pensions minister, Torsten Bell, has said Britain’s fiscal watchdog committed an “incredibly serious breach of the budget process” by accidentally releasing its report on the budget two hours early, before the chancellor had announced her measures.

Speaking to The News Agents podcast, Bell said:

“The OBR is going to have to think very seriously about what happened today. That was an incredibly serious breach of the budget process.”

Bell didn’t explicitly rule out even more taxes in a year time, when asked if this were posssible, saying:

‘Well, what we are doing is making sure that we are doubling down on growth, but also making sure that we’re cutting borrowing every single year and doubling the headroom against our fiscal rules to provide stability to the public finances.’

Here is some more reaction to the budget from opposition parties.

From Ed Davey, the Lib Dem leader

This was a botched budget delivered by a chancellor who has diagnosed the disease, but refuses to administer the cure.

This government has chosen to reject the single biggest thing it could do to turbocharge economic growth and repair the £90bn Brexit black hole.

Labour was elected on a promise of tackling the cost of living crisis and growing the economy - and this is the second budget where it’s failed to do either. For millions of people struggling with higher bills, all this budget really offers is higher taxes.

From Adrian Ramsay, the Green party’s Treasury spokesperson

Instead of delivering a transformational budget to tax extreme wealth fairly and tackle the cost-of-living crisis, this Labour government has once again chosen to paper over the cracks - with half-measures that won’t do enough to fix the deep-rooted problems in our economy that are keeping ordinary people in poverty while the super-rich get richer.

The chancellor spoke about asking everyone to make a contribution, but it is frankly inexcusable that she has made the political choice to squeeze households already struggling with the cost of essentials, whilst letting multimillionaires and billionaires off the hook.

It is indefensible that the chancellor is cutting vital home insulation funding, one of the best ways to lower bills.

And whilst scrapping the cruel two-child benefit cap will be a huge relief to families across the country, it is unforgivable that it has taken 18 months for the chancellor to acknowledge the terrible harm and distress this cap has caused to so many families. Far more action is needed to end the scandal of child poverty.

From Stephen Flynn, the SNP leader at Westminster

This was Keir Starmer and Rachel Reeves’ last budget. They promised change but have delivered complete chaos, higher energy bills, higher food prices and a soaring cost of living - it’s no wonder their own MPs are now plotting to get rid of them” - after the chancellor imposed billions of pounds of cuts and tax hikes to fill the black hole in the Labour government’s finance.

From Rhun ap Iorwerth, the Plaid Cymru leader

This budget makes one thing clear: Wales is being short-changed again.

Nothing in today’s announcements changes the fundamental unfairness facing our nation.

We have weaker fiscal powers than any other devolved nation, meaning less ability to invest in our economy, and the Treasury continues to withhold over £4bn owed to Wales in transport funding. There was no action on increased national insurance or inheritance tax costs which are pushing the Welsh public and private sectors to breaking point. Labour promised change but today proves there is none.

On taxation, Labour’s pick-and-mix approach is dishonest and chaotic. Rather than targeting the wealthiest and the big banks through wealth taxes, Rachel Reeves has chosen to freeze income tax thresholds for those in work, a dishonest and unfair wait to raise further revenue. Weeks of U-turns, last-minute announcements, and mixed messages have left households and businesses confused, undermining confidence in the economy. Labour has no plan – and the people of Wales deserve better.

The Reform UK reaction is at 4.35pm.

And there are extracts from Kemi Badenoch’s response in the chamber on behalf of the Conservatives at 1.47pm and 1.57pm. Here full speech is here.

Rachel Reeves has held a Q&A with reporters at a hospital. After two relatively neutral questions, she called Beth Rigby, the Sky News political editor, who went full Kemi Badenoch. Rigby said that Reeves suggested in her budget speech last year that freezing tax thresholds would be a breach of the manifesto, and she went on: “How in good conscience can you stay on in your job?”

Reeves said that the manifesto referred to the rates of income tax and VAT.

But she also said she was “not going to get into semantics”. She said she accepted that, by freezing thresholds, she was asking people to pay more.

Rigby tried again. She said the IFS say the manifesto promise has been broken.

Reeves replied:

If you read the manifesto, we’re very clear. We say the rates of income tax, national insurance and VAT. But if you are asking, does this have a cost for working people? I acknowledge it does. As I said that in the budget last year. I’m not going to pretend otherwise today.

In fact, the manifesto was not clear. It said:

Labour will not increase taxes on working people, which is why we will not increase national insurance, the basic, higher, or additional rates of income tax, or VAT.

At the time, most policy specialists took the second half of that sentence as the operative part, and many of them are willing to accept that freezing thresholds, while it breaks the spirit of the manifesto, does not break the letter of it.

But other people would argue that “Labour will not increase taxes on working people” is the key clause in the manifesto sentence. And one person who has suggested this is the Rachel Reeves who delivered her budget speech last year. At the time she said:

Having considered the issue closely, I have come to the conclusion that extending the threshold freeze would hurt working people. It would take more money out of their payslips.

I am keeping every single promise on tax that I made in our manifesto, so there will be no extension of the freeze in income tax and national insurance thresholds beyond the decisions made by the previous government.

From 2028-29, personal tax thresholds will be uprated in line with inflation once again.

This passage only makes sense if you assume that freezing thresholds would be a breach of the manifesto. A lawyer would argue that it’s the “so” in the middle of the second paragraph gives it away.

Here is some trade union reaction to the budget.

Paul Nowak, the TUC general secretary, said Rachel Reeves was turning the page on the Tory era.

Fourteen years of Conservative government took a wrecking ball to living standards – with pay packets squeezed, child poverty at crisis levels and vital public services left on their knees after years of cuts.

This government is starting to turn the page on that failed Tory era.

But fixing the mess that the Tories left will take time. We now need to see a relentless focus on affordability and making work pay beyond this budget.

But Christina McAnea, the Unison general secretary, says Labour needs to go “further and faster”.

Scrapping the cruel two-child benefit cap is a victory for thousands of working families. Good riddance to it. But it should’ve happened sooner.

It shows Labour is at last heading in the right direction and helping those who most need support.

But the government must go further and faster if it wants to fix Britain.

And Unite said in a statement.

On the fundamental issues of who pays for the crisis and the investment required to back British industry, the wrong decisions are being made.

Millions of workers are being forced to live hand to mouth, surviving rather than living.

Communities are being ground down by surging energy bills and baked in high food prices, while at the same time profits soar.

Energy companies have made over £3bn in profits, costing households £500, while supermarkets led by Tesco - which made £3.1bn - are coining it in.

The chancellor has picked a side. Health workers, engineers, and tanker drivers will pay through stealth taxes, while city bankers and billionaires go largely unscathed.

Some City experts are sceptical that the tax rises outlined in today’s budget will actually happen as outlined today.

David Zahn, head of European fixed income at Franklin Templeton Fixed Income, says Rachel Reeves has kicked the can down the road, to the point of the next election:

“Today’s UK Budget announcement from the Chancellor sees an increase in spending and borrowing through 2028. However, most of the planned tax rises do not kick in until 2029 and beyond. This approach effectively kicks the can down the road until the next parliamentary election to deal with the spending gap. The probability that those tax changes are delivered seems low given it will be a new parliament, potentially with a different majority party.

“Meanwhile, the OBR’s revised outlook — lower growth post-2025 and higher inflation — should lead Gilts to see higher yields in the long end of the curve.”

Zahn is also telling a briefing in the City now that he doesn’t see much that is pro-growth in today’s budget. It’s “more tax and spend”, he cautions. “In the round, it’s more of the same.”

Former Bank of England policymaker Michael Saunders also has concerns. Saunders, now Senior Economic Advisor at Oxford Economics, says:

In narrow terms – meeting the fiscal rules with greater headroom – the Budget meets its objectives. But in other respects, it looks less reassuring.

First, it implies that all the tightening between 2024/2025 and 2029/2030 is via a rising tax GDP/ratio: the public spending/GDP rises slightly over that period. By contrast, the October 2024 Budget and March 2025 Spring Statement both included a modest contribution (about a quarter of the overall tightening) from a lower spending/GDP ratio. Historical experience suggests that fiscal consolidations focussed on tax hikes have a relatively low success rate.

Second, with public spending revised up, the Budget reinforces the impression that the government is unwilling to take difficult decisions to rein in public spending.

Third, the Budget again postpones the planned fiscal tightening, with the cyclically adjusted higher in 2026-28 but lower thereafter. There is likely to be some scepticism as to whether that postponed tightening will be delivered in the runup to the next election (due in 2029).

Fourth, the Budget lacks any substantial supply-side measures that might significantly raise potential GDP growth and lift the UK out of the current low-growth rut.

As a result, the Budget still leaves the UK with a relatively weak fiscal position, with the public debt/GDP well above levels of 20 years ago, low potential growth and ageing population. The UK is still not securely on a sustainable fiscal path.

Here is Gwyn Topham’s story about the motoring elements in the budget – the fuel duty freeze, and the 3p-per-mile charge for electric vehicles (EVs).

In its initial budget reaction, the Institute for Fiscal Studies says this could turn out to be one of the most significant changes in the budget. It says:

It is welcome that the government has finally set out some sort of plan for how electric cars will be taxed in the long term: a per-mile tax. As the take-up of electric vehicles spreads, this is due to become the second-biggest measure in the Budget, raising £7bn a year in today’s terms by the time all cars are electric. But what the flat tax proposed fails to reflect is the fact that driving at congested times and places imposes much higher costs on society (principally other drivers) than other driving.

But the Office for Budget Responsibility points out in its report that the policy

The yield from the measure is uncertain as it dependent on the uptake of electric vehicles over the next five years. The government’s zero-emission vehicle (ZEV) mandate requires EVs to make up an increasing minimum proportion of total manufacturer sales over the next five years, reaching 80 per cent in 2030. This new charge is likely to reduce demand for electric cars as it increases their lifetime cost. To meet the mandate, manufacturers would therefore need to respond through lowering prices or reducing sales of non-EV vehicles. Overall, as a result of this measure, we estimate there will be around 440,000 fewer electric car sales across the forecast period relative to the pre-measures forecast, with 320,000 of this offset by the expected increase in sales due to other budget measures described below.

Here is the Treasury consultation paper on the proposal.

UPDATE: This post has been amended after the OBR said there was a mistake in the report. The wrong figure has been replaced with the right one. See 5.45pm. I have amended the headline too.

There will be a number of happy faces across the City today, as banks finally had confirmation that they were spared of any tax hikes as part of Reeves’ budget.

David Postings, CEO of lobby group UK Finance, said he recognised that Reeves had tough choices to make but welcomed the “ongoing support she has shown for the financial services sector.”

“This sends an important signal to international markets that the UK is focused on growth and attracting investment.”

Shares in high street banks made further gains on Wednesday afternoon, having jumped on Tuesday following FT reports that banks would be spared a tax raid. NatWest are up 2.4%, Barclays up 2.9%, Lloyds up 3.2% and HSBC up 1.3%.

Chris Hayward, policy chairman at the City of London Corp, said that while Reeves had delivered a “mixed set of measures” for the UK’s financial and professional services sector (raising concerns about taxes on dividends and pension contributions): “No change on bank taxation is welcome and will reassure lenders”.

Postings added:

“A strong economy needs a strong financial sector, which in turn backs jobs, businesses and the whole economy. We look forward to continuing to work in partnership with the government to support its growth mission and the wider economy.”

Household energy costs will tumble by £150 a year for the average gas and electricity bill from next April after the Chancellor agreed to help cover the cost of the government’s green energy policies.

The typical home energy bill will fall from £1,755 today to around £1,665 from 1 April 2026 after Rachel Reeves promised to cover 75% of the costs of a government scheme which supports some of the country’s earliest renewable energy projects through a levy on energy bills which was typically around £88 a year.

Reeves will also scrap the Conservative government’s “failed” energy companies obligation (ECO) scheme which used around £59 per household to fund home energy efficiency improvements - but often the cost for those living in fuel poverty was more than the savings it delivered.

There will also be a £7 saving on VAT from the two measures, adding up to £154 off bills for the average household, the chancellor said:

“I can tell you today that for every family we are keeping our promise to get energy bills down and cut the cost of living with £150 cut from the average household bill from April next year.”.

The help to lower energy bills was warmly welcomed by the energy industry which has seen costs surge in the years since Russia invaded Ukraine, triggering a surge in gas market prices which has led to record high levels of energy debt.

“Support for energy bill payers is long overdue,” according to Dhara Vyas, the chief executive of Energy UK.

“Investing in clean power will protect customers from volatile prices and lead to more stable bills in the future. But people are struggling now, and reducing bills for all customers is an important first step.”

Greg Jackson, the boss and founder of Octopus Energy, Britain’s biggest energy supplier, said: “Making electricity cheaper is also crucial for people adopting electric heating and electric vehicles.”

Q: How is the budget a near-term boost to GDP?

It’s a bit of a fiscal loosening in the near term, explains the OBR’s David Miles during today’s press briefing on its economic and fiscal outlook.

Miles explains that the budget includes “a fairly substantial spending increase” in the next couple of years.

The big increases in tax don’t come until “a bit further down the road”, along with a fall in departmental spending at the end of the forecast horizon.

It’s a slight, what you might call an old-fashioned Keynesian demand boost to the economy in the very near term, and it pushes the growth rate up a little bit.

The Institute for Fiscal Studies is also a bit disappointed by the “mansion tax”. (See 3.14pm.) Here is an extract from the initial budget analysis it has just released. The IFS is always campaigning for sensible tax reform, and it is usually disappointed when chancellor reveal they have other priorities.

Turning to tax, the chancellor found a way to cobble together a sizeable package without increasing the main rates of National Insurance contributions, VAT or income tax. The package was skewed towards raising more from those with high incomes. That’s also true of the largest single measure, a three-year extension to the freeze in personal tax thresholds which raises £8bn in 2029–30 and £13 billion in 2030–31 – though a 1 percentage point increase in all rates of income tax would have raised a similar amount while bringing in more from those at the very top. Because it includes a freeze in national insurance thresholds, it also breaches the government’s manifesto tax promise not to increase National Insurance – as does the cap on salary sacrifice. And, as the chancellor acknowledged, it clearly represents a tax rise on working people. A range of other tax increases – on pension contributions, unearned income, business investments and capital gains – weaken incentives to save and invest.

A grand tax-reforming budget, this certainly was not. The chancellor continues to show no real appetite for using tax reform to boost growth. One bright spot was the decision to do something on the taxation of electric cars, for which the government does deserve credit, though levying a motoring tax which bears no relation to congestion is far from ideal. When it comes to property, we now have a council tax system based on 1991 values, with a new complicated bolt-on for high-value houses based on what the house is worth today. There’s a reasonable case for levying more high-value homes, but the design of this tax leaves much to be desired.

The IFS also questions whether the spending restraint that Rachel Reeves has pencilled in for the end of the decade are credible.

To stress: borrowing will be higher in each of the next three years. Only after that point, from 2029–30, will borrowing be lower than previously planned, due to a set of back-loaded tax rises and promises of spending restraint in the next spending review period.

The additional spending and borrowing in the short-term is readily believable. The future restraint, just before the next election? One could be forgiven for treating that with a healthy dose of scepticism.

Here is the Treasury paper explaining how the high value council tax surcharge (HVCTS) – aka the “mansion tax” – will work. It will be based on property values in 2026, and it will come into effect from April 2028.

It will be paid by homeowners, not occupiers. And it will operate alongside council tax, not as a replacement.

The Treasury says fewer than 1% of homes are expected to be above the £2m threshold.

Here is the chart showing how much people will pay, based on the value of their home.

The money will go to central government, not to councils.

Given the UK’s obsession with property (and the fact that senior people in the media tend to own expensive homes), this is likely to attact a lot of controversy.

But the revenue to be raised is surprisingly modest. “The HVCTS is estimated to raise around £430m of revenue per year from 2028/29 to support funding for local government services,” the Treasury says.

And some campaigners are saying Rachel Reeves has ducked the opportunity for more significant reform.

Andrew Dixon, founder and chair of Fairer Share, which campaigns for a proportional property tax, said:

The chancellor has missed a critical opportunity to enact the meaningful, long-overdue reform that our broken council tax system desperately needs. Revaluing the top bands is an acknowledgment that the system is outdated, yet the refusal to launch a comprehensive review of UK property taxes leaves the job unfinished – and millions of people continue to face an unfair, regressive system.

Adjusting the top bands is nothing more than a superficial fix. The chancellor herself referenced the problem, a Band D house in Darlington can still pay a higher rate of council tax than a mansion in Kensington. Even with a surcharge of £7,500, a £5m mansion would pay just 0.19% of its value in council tax. That rate is more than five times lower than what families in Darlington face.

And this is from Faiza Shaheen, executive director at Tax Justice UK.

Britain’s economy needed a total renovation, but what we got was a cheap paint job to cover the cracks in the foundations. After all the talk about fairness, this budget disappoints from a tax justice perspective.

It is shocking that the biggest revenue raising measure in this budget, that should have been about taxing the super-rich more, will be a freeze on income tax thresholds that will make working people worse off.

Even the proposed mansion tax, which is a step in the right direction, is a messy half measure and raises a relatively small amount.

The Office for Budget Responsibility is fielding questions from the press about the accidental release of its Economic and Fiscal Outlook today, before the chancellor had delivered the budget.

Jon Craig of Sky News asks whether OBR chief Richard Hughes will carry the can for this unprecented error.

Craig reminds Hughes of previous budget leaks:

Q: A chancellor of the exchequer resigned for less. This leak today is more damaging than Hugh Dalton in 1947, who quit, or the budget leak to the Mirror in 1996. Have you offered to resign? If not, why not?

Richard Hughes replies that the document was unintentially uploaded to the OBR’s website too early. There is an investigation into what happened, which will report to the OBR’s oversight board, the Treasury and the House of Treasury committee, and he will abide by their recommendations.

[reminder, Hugh Dalton blundered by telling political journalists the content of his budget; they published before he’d given the speech]

Q: So if they say you should resign, you’ll go?

Hughes indicates he would, replying:

I will abide by their recommendations, and I always serve so long as I have the confidence of the chancellor and the Treasury committee.

Q: Do you know how it happened?

Hughes says he won’t preempt the investigation.

He says the OBR understands how it happened, but want to get to the fundamental causes and make sure it won’t happen again.

Q: Has anyone been disciplined?

Hughes replies that the OBR has been focused on getting the EFO out at the right time, and will publish the investigation once it is finished.

But he confirms that the mistake was made within the OBR.

When Rachel Reeves addressed Labour MPs on Monday, she told them that it would be a Labour budget, because rich people would contribute most. “When you look at the distributional analysis you’ll see this is … a progressive budget, a budget I’m proud of,” she said.

Here is the chart Reeves was referring to.

On the basis of this, Reeves has appeared a near-perfect progressive outcome. The poorest 10% of households gain most as a proportion of household income (more than 7%), with households proportionately gaining less as they get wealthier, and only the richest 10% losing out.

If you just look at the impact of the tax changes, the picture is different. The poorest 10% lose out more proportionately than other deciles, apart from the wealthiest 30%.

But the welfare changes (particularly getting rid of the ECO – see 1.38pm) do help the poorest families disproportionately.

And the Treasury only gets the graph to look like a ski slope by including “benefits-in-kind from public services” – extra spending on services like the NHS, which tend to benefit poorer families proportionately more.

The decision to extend the freeze on income tax thresholds will mean UK workers pay billions of pounds more in tax.

The freeze has been extended for another three years, from 2028-29 to 2030-31.

This means the income tax personal allowance (how much you can earn without incurring the basic rate of income tax) will remain at £12,570. The higher-rate threshold sticks at £50,270 (meaning workers pay 40% on income over that level), while the additional-rate threshold (45% tax) remains at £125,140, respectively.

As wages rise with, or ahead of, inflation, more people will be dragged into higher bands.

You can track how much more you might pay, here:

Ed Miliband, the energy secretary, just returned from Cop30, where he was talking up Labour’s manifesto commitment to end all new north sea oil and gas licences, and leading a global charge to phase out fossil fuels

But today, the north sea transition plan has just been released, and it allows for new drilling on or around existing oil and gas fields, in areas which aren’t currently licensed. These are called “tiebacks”.

Miliband is not calling these new licences, but Transitional Energy Certificates, and his department says they are “necessary for a managed, orderly and prosperous transition.”

Environment campaigners are not thrilled about this, but they are more concerned about the possibility of a licence for the giant new Rosebank oilfield, which has already been granted, being activated by the secretary of state issuing a consent.

This is because the amount of oil and gas that could be produced from them is relatively small: according to analysis by campaign group Uplift, new discoveries within a 50km radius of existing production sites - that would require a new licence to proceed - contain just 25 million barrels of oil and 20 million barrels of oil (equivalent) of gas.

For context, the Rosebank oil field would involve the extraction of nearly 500 million barrels of oil and gas-equivalent over the course of its lifetime.

After all of the build-up, chancellor Rachel Reeves may be relieved by the fairly calm early reaction on financial markets, our colleague Jasper Jolly reports from trading firm Saxo UK.

There has been some volatility: sterling dropped from about $1.3150 against the US dollar to $1.3123, before rising as high as $1.3220 - the highest since the end of October. That leaves the currency up by about 0.2% for the day.

Sitting on the 26th floor of a tower in London’s Canary Wharf financial district, Neil Wilson, investor strategist at Saxo UK, said:

“There’s no great stinging surprise that has upset markets. That has allowed it to be a bit of a relief.

“I just wonder about the credibility of the forecasts.

There was the initial flurry of excitement after the Office for Budget Responsibility accidentally released details early, but gilt yields have also been relatively steady - possibly because its forecasts were not as negative as expected.

UK 10-year gilt yields, the benchmark measure of government borrowing costs, were at about 4.5% before the leak, and rose up to 4.542%.

Higher yields mean higher borrowing costs, so the government will welcome the subsequent yield decline to 4.462% at the time of writing.

Mike Owen, a sales trader at Saxo UK, said:

“Everyone was fearing the worst, so the price action is, ‘Phew’. It’s such a minefield to try to get through it.

The revenue-raising measures announced by the chancellor means the UK’s tax take is heading to a record high in six year’s time.

The Office for Budget Responsibility has calculated that total public sector receipts are forecast to rise as a share of the economy from 38.9% of GDP in 2024-25 last year, to 42.4% of GDP in 2030-31. That’s an increase from £1.1 trillion to £1.5 trillion.

Within that, the tax take (defined as National Accounts taxes as a share of GDP) is forecast to increase from 34.7% of GDP in 2024-25 to a peak of 38.3% of GDP by the end of the forecast period.

That 2030-31 peak would be a historic high and a 5.4 percentage point increase on the pre-pandemic level of 32.9% of GDP in 2019- 20.

The OBR warns that this high tax take creates risks to the economy, and to its forecasts.

A higher level of the tax take increases the risk that incentives within the tax system distort or constrain economic activity by more than expected.

The yield from the personal tax threshold freezes, extended in this Budget, is very sensitive to future inflation and nominal earnings growth. If nominal earnings growth was 1.8 percentage points lower than forecast, this would reduce personal tax revenues by 2029-30 by £19 billion.

Badenoch says the government is paying more to borrow than the government did when the Tories were in power.

She says Reeves blames everyone else for the situation is in. But her decisions are to blame, she says.

She says Reeves released most of the speech in advance.

This has made the UK a “shambolic laughing stock”, she says. She says Reeves should resign for that, if she does not resign for her decisions.

She says all the key indicators are going down.

And all we have had from the chancellor have been soft articles featuring her “whining” about misogyny and mansplaining.

She says people are not criticising Reeves because she is a woman.

Let me explain to the chancellor woman to woman, people aren’t complaining because she’s female - it’s because she’s incompetent.

She says Reeves interrupted people at breakfast with a speech that told them income tax was going up. But then three days later, she changed her mind.

She describes Reeves as “spineless, shameless and completely aimless”.

The budget is “littered with broken promises”.

Reeves promised to help savers, but today she is raising taxes for savers, Badenoch says.

She says Labour promised not to raise council tax rates. But they are now introducing a new charge that won’t even raise very money.

And Badenoch says Reeves admitted in her budget speech last year a tax freeze would be a breach of the manifesto.

The real story is “Labour have lost control of welfare spending”, she says.

Badenoch started by saying she hoped Reeves enjoyed the budget, because it would be her last.

She said the budget was a “total humiliation”. And she said Reeves will go down as the country’s worst chancellor.

Reeves says the OBR has confirmed that her budget choices will reduce inflation by 0.4%.

She ends by saying that she has been able to take action on the cost of living, while keeping her election manifesto promises on tax.

There are many people who will argue that freezing tax thresholds does break the manifesto – and they are likely to quote what Reeves herself said on this last year when they make this argument.

Reeves says energy bills are high.

The government is investing in insulation.

But that is not enought.

The Tories’ ECO (energy company obligation) system costs more than £1bn a year, she says. But she says, for many families, it costs more than they save. So she will scrap it.

She says this move will cut the average household bill by £150 on average.

Sanjay Raja, Deutsche Bank’s chief UK economist, has calculated that today’s budget is the third largest tax-raising Budget since 2010.

[that’s after the March 2021 and the October 2024 Budget, I think].

Raja explains:

Nearly £30bn in taxes were announced, with the extension of the fiscal drag and tapering of pensions and employee salary sacrifice schemes making up the bulk of the tax raising measures. Increases in property tax, gambling tax, and a tax on electric vehicles were also announced. But tax hikes were offset by spending rises elsewhere, which amounted to £12bn.

Raja adds that despite the OBR’s downgrades on productivity, the Chancellor was left with larger headroom than anyone expected going into this forecast, offset by stronger earnings growth and equity prices.

He concludes:

Put simply, the OBR projections were far better than we expected, with the impact of the productivity downgrade on the borrowing outlook far less than we and others anticipated. A smaller hit to the fiscal headroom therefore required a smaller amount of fiscal consolidation.

Reeves says it is the government’s job to cut child poverty.

But there is one policy above all that has increased child poverty – the two-child benefit cap.

She says this has failed on its own terms. It has not cut the benefits bill, and it has not led to people having smaller families.

It has led to child poverty going up.

She says she does not think children should be penalised.

And she says the two-child benefit led to the rape clause, leading to women having to prove they were raped if they wanted to be exempt from the two-child limit.

She says that it humiliating. She will not tolerate, she says – saying she is the first woman to be chancellor.

And so she will abolish the two-child benefit cap from April.

Reeves is now talking about gambling.

Remote gaming duty is associated with the highest rate of harm. She says the duty on that is going up from 21% to 40%.

But there will be no increase for in-person gambling, or horse racing.

And the duty on bingo will be abolished, she says.

She says this will raise more than £1bn by 2031.

And she says she will not need to raise income tax, national insurance or VAT

Reeves is now talking about cars.

She says she is introducing a new vehicle excise duty for electric vehicles (EVs).

Reeves says she is increasing the tax paid on dividend income by 2 percentage points.

She says her tax reforms last year raised an extra £8bn from wealth.

She says a band D home in Darlington pay £300 more in council tax than a £10m home in Mayfair in London.

She says she is introducing new charge for properties worth more than £2m.

I am introducing the high value council tax surcharge in England, an annual £2,500 charge for properties worth more than £2m, rising to £7,500 for properties worth more than £5m.

Reeves turns to tax thresholds.

She confirms they are being frozen for another three years from 2028.

She says Kemi Badenoch supported this move when her party did it.

She says she knows this decision will affect working people. She said that last year.

She is asking everyong to make a contribution.

But she will keep that down by further reforms to the tax system.

Reeves turns to the mineworkers’ pension funds.

She will transfer the investment reserve from the British Coal fund to its members, she says.

PA Media has filed this on the salary sacrifice plans, based on the OBR document. Reeves has not mentioned this in the speech yet.

Salary-sacrificed pension contributions above an annual £2,000 threshold will no longer be exempt from national insurance from April 2029, according to a document published in “error” ahead of the budget.

The Office for Budget Responsibility (OBR) document said that salary-sacrificed pension contributions above £2,000 would be treated as ordinary employee pension contributions in the tax system and therefore be subject to both employer and employee national insurance contributions.

The document said: “The policy results in an increase in NICs (national insurance contributions) which is estimated to raise £4.7 billion in 2029/30 and £2.6 billion in 2030/31.

“The costing assumes that, in most cases, employee pension contributions above £2,000 that were part of a salary-sacrifice scheme will become subject to employer and employee NICs, either because they move to a standard pension scheme or continue in a salary-sacrifice scheme under the new tax arrangements.”

Reeves is reading out the deficit figures.

And she says debt as a proportion of GDP will fall at the end of the forecast.

As feared, the UK’s growth forecasts for the next few years have been revised down, according to the accidentally released forecasts from the OBR.

That’s a blow to the government’s aim to achieve the highest sustained growth in G7, even though growth this year will be faster than expected.

The OBR’s report shows that UK GDP is now forecast to be:

• 2025: 1.5%, up from the 1% forecast in the spring statement in March

• 2026: 1.4%, down from 1.9%

• 2027: 1.5%, down from 1.8%

• 2028: 1.5%, down from 1.7%

• 2029: 1.5%, down from 1.8%

• 2030: 1.5%, a new forecast

These are all weaker than the UK’s trend growth rate, before the financial crisis of 2007/08.

Reeves says the UK has some of the lowest rates of retail investment in the G7.

There are people who would be better off if they had invested in stocks and shares, not a cash ISA.

She says she will keep the £20,000 Isa allowance – but designate £8,000 of that for Isa with stocks and shares.

UPDATE: Reeves said:

From April 2027, I will reform our Isa system, keeping the full £20,000 allowance while designating £8,000 of it exclusively for investment, with over-65s retaining the full cash allowance.

And thanks to our changes to financial advice and guidance, banks will be able to guide savers to better choices for their hard-earned money.

Over 50% of the Isa market – including Hargreaves Lansdown, HSBC, Lloyds, Vanguard and Barclays – have signed up to launch new online hubs to help people invest here in Britain.

Reeves says the OBR productivity forecast has been downgraded. (See 12.21pm.)

She says this is a result of long-term problems, including Brexit.

That means lower tax revenues.

She says these forecasts are “the Tories’ legacy”.

Reeves says the OBR forecast the economy to grow by 1% in the spring.

But they have updated the growth forecast for this year to 1.5%, she says.

The new Economic and fiscal outlook, which the Office for Budget Responsibility accidentally released this morning, is packed with information about what will be in the budget.

Key points from the report include:

• The chancellor has more than doubled her headroom to keep within her fiscal rule to balance the budget, from £9.9bn to around £22bn

• This is being financed by tax rises, which will pull in an extra £26bn in 2029-30, including through freezing personal tax thresholds. This will bring the tax take to an all-time high of 38 per cent of GDP in 2030-31.

• On income tax personal allowances, the higher-rate threshold and additional-rate threshold are frozen at £12,570, £50,270 and £125,140, respectively, until 2030-31.

• Real GDP is forecast to grow by 1.5% on average over the forecast, 0.3 percentage points slower than projected in March…

• … but growth this year has been revised up to +1.5%. up from 1% expected in March.

• The OBR has cut its forecast for the underlying rate of productivity growth in the medium term to 1.0 per cent, down by 0.3 percentage points. The OBR says that the “significant rebound from recent negative shocks has not materialised”

• The two-child limit in universal credit is being lifted

• The chancellor is increasing the tax rates on dividends, property and savings income by 2 percentage points, which will raise £2.1bn

• Salary-sacrificed pension contributions above an annual £2,000 threshold will no longer be exempt from national insurance contributions from April 2029.

• A new high value council tax surcharge is being introduced, targeting properties worth over £2m. There will be four price bands with the surcharge rising from £2,500 for a property valued in the lowest £2 million to £2.5 million band, to £7,500 for a property valued in the highest band of £5 million or more. This measure is estimated to raise £400m in 2029-30.

• There will be a new mileage-based charge on electric and plug-in hybrid cars from April 2028 at around half the fuel duty rate paid by drivers of petrol cars (raising £1.4bn)

Rachel Reeves, the chancellor, says the OBR report was released on their website before this statement. She says this is “deeply disappointing” and a “serious error”.

In the Commons Mel Stride, the shadow chancellor, says there has been an “unprecedented leak” of the OBR report. The “leak” may constitute a criminal act, he says. He asks the deputy speaker how the Commons can force a leak inquiry.

And he asks for MPs to be given copies of the report now, not after the budget speech is over, because everyone else has had a chance to read the report.

Nusrat Ghani, the deputy speaker, says there have been extensive leaking ahead of the budget. But parliament should be told first.

She says MPs will be able to read the report after the chancellor’s speech is over.

This, from Ed Conway at Sky News, shows the market reaction to the “leak”. Gilt yields falling meant government borrowing costs went down. (See 12.24pm.)

UK borrowing costs are falling following the accidental early release of the OBR report, Graeme Wearden reports on his business live blog.

The OBR has apologised for releasing its report earlier, PA reports:

A link to our economic and fiscal outlook document went live on our website too early this morning. It has been removed.

We apologise for this technical error and have initiated an investigation into how this happened.

We will be reporting to our oversight board, the Treasury, and the Commons Treasury Committee on how this happened, and we will make sure this does not happen again.

Our economic and fiscal outlook and supporting documents will be released when the chancellor has finished her speech.

This is from Reuters.

Britain’s Office for Budget Responsibility cut its medium-term productivity growth forecast to 1%, down from the 1.3% guidance it provided in March, according to estimates by the country’s budget watchdog published on its website on Wednesday ahead of finance minister Rachel Reeves’ budget statement.

“The UK’s productivity performance has undershot our forecasts, despite several substantial downgrades since 2010, as a significant rebound from recent negative shocks has not materialised,” the OBR said.

The downgrade was not a result of any particular government policies, the OBR said, adding that it was connected to global trade policy and other structural trends likely to affect Britain’s productive potential in future.

Here are more Reuters snaps from the OBR report.

UK’S OBR: AROUND THREE-QUARTERS OF THE PLANNED REDUCTION IN BORROWING OVER THE NEXT FIVE YEARS NOW COMES FROM TAX INCREASES

UK’S OBR: IN CENTRAL FORECAST, THE GOVERNMENT’S FISCAL MANDATE FOR THE CURRENT BUDGET TO BE IN BALANCE IN 2029-30 IS MET BY A MARGIN OF 22 BILLION POUNDS

UK’S OBR: BUDGET POLICIES INCREASE SPENDING IN EVERY YEAR AND BY £11 BILLION IN 2029-30

Ed Davey, the Lib Dem leader, says the OBR figures out now show that taxes are rising to a record high.

Starmer says details of budget will be out in the next few minutes.

Badenoch asks if Starmer will launch an inquiry into the budget leaks.

Starmer says the budget is 25 minutes away. He does not call for a leak.

(But, given a leak of this seriousness, there is bound to be one.)

More from Reuters.

UK’S OBR- TOTAL GROWTH IN NOMINAL GDP OVER THE FORECAST IS ONLY AROUND 1 PERCENTAGE POINT LOWER THAN IN MARCH AND IS MORE TAX RICH

UK’S OBR: THIS BUDGET EXTENDS THE FREEZES OF PERSONAL TAX THRESHOLDS FOR A FURTHER THREE YEARS FROM2028-29 TO 2030-31

The OBR forecasts seem to have leaked. Reuters has snapped this.

UK’S OFFICE FOR BUDGET RESPONSIBILITY OUTLOOK: REAL GDP IS FORECAST TO GROW BY 1.5 PER CENT ON AVERAGE OVER THE FORECAST, 0.3 PERCENTAGEPOINTS SLOWER THAN WE PROJECTED IN MARCH, DUE TO LOWER UNDERLYING PRODUCTIVITY GROWTH

There is more. I will post them in a moment.

The Metropolitan police have made “several arrests” after farmers drove their tractors to Westminster for a protest in defiance of restrictions on bringing agricultural machinery to the demonstration. (See 9.26am.) In posts on social media, the Met said:

Anyone breaching conditions by bringing vehicles, including tractors or agricultural vehicles, to today’s farmers protest will be asked by officers to leave.

If they refuse to comply with the conditions, officers will have to make arrests for offences under the Public Order Act.

We have already spoken to a number of individuals this morning to advise them of the conditions.

The majority have listened to officers and complied with the conditions, however, several arrests have been made.

Nigel Farage, the Reform UK leader, has said his party will pay for the legal defence of any farmers arrested at today’s protest in Westminster. He said:

The farmers’ planned protest on Whitehall has been cancelled by the police at the last moment.

They have come to London and are now being arrested. This is outrageous.

Reform UK will provide full legal support to every farmer protesting peacefully today.

Downing Street has issued a readout from this morning’s cabinet meeting. A spokesperson said:

The prime minister opened cabinet by thanking the chancellor and her wider team for their work on today’s udget. He said they had achieved balance, stability and fairness.

The prime minister said cost of living issues affected almost every family and the government had introduced a number of immediate measures to tackle it, including the extension of free breakfast clubs, free school meals, reducing school uniform costs, freezing prescription charge costs or freezing rail fares for the first time in 30 years.

The prime minister said these were a strong and tangible set of measures that directly drive down the cost of living for people right now.

He said today’s budget was not a spreadsheet, but a question of choices centred in fairness. Today’s budget, he added, was about what kind of country we want to live in. He said the fight was between renewal or decline - and this government chose renewal.

The prime minister then invited the chancellor to set out the budget in more detail to cabinet. The chancellor then did so, saying the government was making the fair and necessary choices to strengthen our foundations and drive down the cost of living.

Rachel Reeves and her Treasury team have posed for the traditional picture outside 11 Downing Street. Then she set off for the Commons.

There is video here.

Paul Nowak, the TUC general secretary, has rejected the concerns raised by the Resolution Foundation (see 9.54am) about the rise in the minimum wage rates. Asked about the thinktank’s comments, Nowak told Times Radio:

I don’t accept those concerns ...

First of all, that recommendation is based on the Low Pay Commission, which brings together employers, unions, independent experts, they’re tasked with making a recommendation on the minimum wage, which balances getting money into people’s pockets and the impact on unemployment.

Second thing is that every time the minimum wage goes up, we hear effectively scaremongering that this will cost jobs, and that hasn’t happened.

But the third thing is just on those national minimum wage rates for younger workers. Look across our big supermarkets, for example; they’ve all moved to phase out low rates of pay for young people. Why? Because young people have the same outgoings. Not everybody can rely on the bank of mum and dad, but they’re doing the same work, and you should pay somebody the right wage for the job they do.

And here are some of the other budget day front pages.

The Daily Mirror is the only one that is clearly positive for the Treasury.

Here are some of the more factual, or neutral, ones.

And here are some of the harsher ones.

Last night the Treasury announced increases to the the national living wage (NLW) and the national minimum wage (NMW), which is for younger workers. It was another of the budget announcements released early. Here are the figures from the Treasury.

From 1 April 2026, the NLW will rise by 4.1% to £12.71 per hour for eligible workers aged 21 and over. This will increase the gross annual earnings of a full-time worker on the NLW by £900, benefiting around 2.4m low-paid workers.

The NMW rate for 18–20-year-olds will also increase by 8.5% to £10.85 per hour, narrowing the gap with the NLW. This will mean an annual earnings increase of £1,500 for a full-time worker, and marks further progress towards the government’s goal of phasing out 18-20 wage bands and establishing a single adult rate.

The NMW for 16–17-year-olds and those on apprenticeships will increase by 6% to £8 per hour.

The Resolution Foundation thinktank welcomed the news. But, as Graeme Wearden reports on his business live blog, it also warned that increasing the rate for younger workers could be problematic. Nye Cominetti, principal economist at the thinktank, said:

The latest rise in the national living wage – while small compared to recent history – will nonetheless deliver a welcome wage boost to more than two million workers and their families.

Younger workers are set for an even bigger pay rises – but these steep increases risk causing more harm than good if they put firms off hiring and push up NEET [not in employment, education or training] rates.

The minimum wage has good to claim to be Britain’s biggest policy success in a generation. But at its higher level the government and low pay commission need to act with more flexibility when setting rates so they can respond to changing labour market conditions.

The Resolution Foundation is seen as broadly centre-left and mostly it advocates the sort of tax policies that the Daily Mail hates. But this morning it is quoted approvingly in the Mail’s splash story highlighting criticism of the minimum wage increases.

Yesterday the Metropolitan police said they were not allowing a planned protest in Westminster by farmers to coincide with the budget. Farmers have been protesting regularly about the decision announced in Rachel Reeves’ budget last year to extend inheritance tax to farms.

The decision was criticised by the Conservative party, who said originally the Met had indicated the protest would be allowed. Last night Victoria Atkins, the shadow environment secretary, issued a statement saying:

It doesn’t smell right, particularly when we think of the regular and frequent protests that are allowed in SW1 which inconvenience motorists, residents and businesses without consideration. Is this to save the chancellor embarrassment ahead of her budget of broken promises?”

This morning some farmers turned up anyway. As PA Media reports:

A number of tractors were seen driving through Westminster early on Wednesday, with police stopping around 20 of them in the vicinity.

This included a farmer dressed as Father Christmas, his tractor carrying a large spruce tree and bearing a sign that read “Farmer Christmas – the naughty list: Keir Starmer, Rachel Reeves, David Lammy, Diane Abbott, Angela Rayner & the BBC”.

The tractor was parked in Whitehall before Metropolitan Police officers intervened.

Another tractor remains parked outside Parliament in Abingdon Street bearing the slogan “Fools vote Labour”.

Darren Jones, the Cabinet Office minister and chief secretary to the prime minister, admitted this morning that some of the pre-budget leaks have infuriated No 10.

Jones was on the morning interview round for the government this morning and, asked about budget leaks, he told LBC:

There have been some leaks which are unacceptable and not very helpful.

We’ve had to read the riot act to people in government about that.

Jones seemed to be referring in particular to the Financial Times story that revealed that Rachel Reeves and Keir Starmer had decided not to raise income tax in the budget, which would have breached a manifesto promise, even though they had clearly signalled the previous week that they would.

While some pre-budget stories that appear in the media are the product of official briefing, the FT story was not sanctioned and, even though it was true – rather, especially because it was true – it was not something No 10 wanted revealed at that point.

This is how the Treasury summed up the budget in a news release issued last night. It refers to budget measures that have already officially been announced, as well as setting out what Rachel Reeves says are her priorities.

[The budget] will include action to cut NHS waiting lists, cut debt and borrowing, and cut the cost of living to secure a strong future for the country, built on fairness and fuelled by growth.

Action to keep prescription costs under £10, freeze rail fares for the first time in 30 years and increase the national minimum wage and national living wage by £1,500 and £900 respectively has already been confirmed to put more money in people’s pockets at this budget.

Investment for 250 neighbourhood health centres has also been confirmed as part of the chancellor’s commitment to slash NHS waiting lists further and end the postcode lottery of healthcare access.

And here is a quote from Reeves.

Today I will take the fair and necessary choices to deliver on our promise of change.

I will not return Britain back to austerity, nor will I lose control of public spending with reckless borrowing.

I will take action to help families with the cost of living … cut hospital waiting lists … cut the national debt.

And I will push ahead with the biggest drive for growth in a generation.

Investment in roads, rail and energy. Investment in housing, security and defence. Investment in education, skills and training.

So together, we can build a fairer, stronger, and more secure Britain.

Good morning. Budgets fall into two categories – reset ones, and continuity ones. Continuity budgets are more normal (or at least they were until British politics entered near-permanent crisis mode), and the reset ones tend to happen immediately after an election, or when there has been a change of chancellor. Reset budgets are more interesting (but interesting in the way journalists use the word, which is when what they really mean is ‘bad news’). This time last year Rachel Reeves thought the 2025 budget would be a continuity one, but instead it has turned into a colossal reset challenge – and, indeed, an event with the potential to make or break the Keir Starmer premiership.

Here is our overnight preview story.

The stakes are particularly high because anyone who has spent time talking to Labour MPs in recent weeks believes there is a chance that, by this time next year, Starmer could be out of office. There are good reasons why that probably won’t happen, but the idea that it might isn’t preposterous. That is one reason why there is so much at stake.

We have covered the reasons for this at length over the past few months and there is no need to rehearse them here. As for what to expect in the budget, Richard Partington has a good article here explaining the context.

And, in our First Edition newsletter, Phoebe Weston has a guide as to what to expect.

I will be focusing exclusively on the budget today (apart from covering PMQs) and Graeme Wearden, who writes the business live blog, will be joining me. As usual, we will be covering the speech minute by minute, bringing you reaction and analysis, and diving into the budget documents to find the bits Reeves did not mention in her speech.

Here is the timetable for the day.

9am: Keir Starmer chairs cabinet, where Rachel Reeves will brief colleagues on the budget.

Noon: Starmer faces Kemi Badenoch at PMQs.

12.30pm: Reeves delivers the budget. Kemi Badenoch responds on behalf of the Conservative party.

2.30pm: Richard Hughes, chair of the Office for Budget Responsibility, holds a press conference.

Afternoon: Starmer and Reeves are due to speak to staff at a hospital where they will take questions on the budget.

3pm: Nigel Farage, the Reform UK leader, holds a post-budget press conference.

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