Households face council tax hikes and £10billion stealth levies as Reeves gets boxed into corner by shrinking economy

Scottish Sun

12-06-2025

Economists warned the circumstances meant tax hikes are almost certain this autumn
GOGGLE-BOXED IN Households face council tax hikes and £10billion stealth levies as Reeves gets boxed into corner by shrinking economy
HOUSEHOLDS face council tax hikes and £10billion in stealth levies as Rachel Reeves gets boxed into a corner by the shrinking economy, experts warn.
The Chancellor, who wore protective goggles during a visit to the University of Derby yesterday, learned growth fell 0.3 per cent in April — less than 24 hours after her £113billion spending review splurge.
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Rachel Reeves wears protective goggles during a visit to the University of Derby
Credit: Simon Walker / HM Treasury
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Households face council tax hikes and £10billion in stealth levies
Credit: Getty
Businesses are reeling from the National Insurance rise, a jump in the minimum wage and ongoing uncertainty over Donald Trump's global trade war.
Economists warned the circumstances meant tax hikes are almost certain this autumn — along with hard-pressed town halls having to up council tax rates by five per cent next year to pay for local services.
Former Office for Budget Responsibility committee member Andy King said 'the writing was on the wall for another fiscal hole' — which would trigger tax rises or possible spending cuts in the Budget.
Another expert accused Ms Reeves of 'making up numbers' in her spending review as there were few clues where savings would be found.
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READ MORE ON SPENDING REVIEW
TAX BLOW Council tax bills to rise at fastest rate in 20 years after Reeves' review
Paul Johnson, from the Institute for Fiscal Studies, said her demands that all Whitehall departments cut administration budgets by ten per cent a year were not the result of a 'serious analysis'.
He also said that if Ms Reeves was forced to raise taxes, the most politically straightforward approach would be to extend the freeze on income tax thresholds.
Mr Johnson added that her plans will result in a 'sting in the tail' because local authorities would have to raise their levies.
More than half of Brits — 52 per cent — reckon Ms Reeves' spending review will have a negative economic impact rather than positive.
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But one piece of good news did emerge yesterday, as it was revealed the UK was finally ready to sign its trade deal with the US.