Chancellor Calls for New Economic Forecast Amid Speculation of Fiscal Update
Chancellor Rachel Reeves has requested the Office for Budget Responsibility (OBR) prepare a new economic and fiscal forecast for release on March 26, 2025
Reeves confirmed her intention to provide a related parliamentary statement. While the announcement is not expected to introduce a full-scale budget—coming just five months after the previous one—it could take the form of a “spring statement,” featuring minor adjustments or additional details on spending plans.
The OBR, which is legally required to produce two forecasts each fiscal year, will fulfil its obligation with this March update. However, the Government’s more comprehensive multi-year spending review, due in 2025, remains without a confirmed publication date.
Reeves has signalled that the upcoming spending review will demand significant savings from Government departments, with a target of 5% in efficiency cuts. The Treasury has acknowledged these reductions will require “difficult” decisions, raising questions about their potential impact on public services.
Labour Cannot Promise No More Tax Hikes
Sir Keir Starmer has sought to assure voters that further tax rises are not part of his current plans before the next general election. However, he stopped short of ruling them out entirely, citing the possibility of "unforeseen" circumstances.
Speaking to BBC Breakfast, the prime minister emphasized his intention to avoid repeatedly raising taxes but acknowledged that future events could force his hand. “I don’t want to suggest we’re going to keep coming back for more because that isn’t the plan,” he said. However, he added, “What I can’t do is say to you there are no circumstances unforeseen in the future that wouldn’t lead to any change at all.”
Starmer pointed to major recent global crises, such as the Covid pandemic and the war in Ukraine, as examples of unpredictable challenges that can disrupt even the best-laid plans. “If you look at Covid and Ukraine, everyone knows there are things we can’t see now,” he said.
Despite this caveat, Starmer underscored that his government’s priority has been to address tough decisions upfront. “I can tell you our intention was to do the tough stuff in that Budget, not keep coming back,” he explained, adding that his policies are designed to “turn the country around.”
He acknowledged that his approach might not always win favour but argued it was necessary for long-term improvement. “I just don’t want to do what politicians have done in the past, which is to get in the warm bath of empty promises,” he said. “I’m prepared to roll up my sleeves and tell people it’s tough—we’re going to do it, but you’re going to be better off.”
Facing Tax Challenges Together: A Heartfelt Thank You to Our Clients and Best Wishes for 2025
As the festive season draws near, we want to take a moment to reflect on the year gone by and extend our heartfelt gratitude to our valued clients and trusted professional advisers. Your support and collaboration throughout 2024 have been deeply appreciated, especially during a year marked by the change in Government and the tax policy shifts.
We remain steadfast in our commitment to supporting UK business owners as they navigate the complexities of their tax affairs in the year ahead. Whatever 2025 may bring, we are here to help you face challenges and seize opportunities with confidence.
From all of us, we wish you and your loved ones a Merry Christmas and hope the New Year brings health, happiness, and prosperity. We look forward to reconnecting with you in 2025 and continuing to work together for your success.
How Can Qubic Help?
To navigate these potential changes, Qubic offers tailored tax planning services. Our expertise can help mitigate the impact of higher taxes and leverage current reliefs effectively. The window of opportunity to leverage current tax rates and reliefs is narrowing, and the time to act is now.
We understand that the uncertainty surrounding tax changes can be challenging, and we are here to help you.
For more information on our tax planning services and to discuss your options with one of our team, simply click the link below:
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