Reeves expected to announce big tax hikes

Labour promised voters it would cut long waiting lists in the state-run health service, build more housing and improve schools

UK's new finance minister Rachel Reeves will announce what may be the biggest tax hikes in three decades on Wednesday in a bid to fix the country's sagging public services, alongside billions of pounds of extra borrowing to overhaul the economy.

The Labour government is betting that its first budget after 14 years of Conservative rule can fund its election pledges without triggering the kind of bond market chaos that brought down former prime minister Liz Truss in 2022.

Labour promised voters it would cut long waiting lists in the state-run health service, build more housing and improve schools.

It falls to this Labour Party, this Labour government, to rebuild Britain once again, Reeves said in an excerpt of her budget speech shared with media on Tuesday.

Four months on from the election, Prime Minister Keir Starmer has said "those with the broadest shoulders" will have to pay more tax under the budget plan that Reeves will announce to parliament at around 1230 GMT.

Britain's previous Conservative government left an undisclosed £22 billion hole in the public finances, Reeves has argued - a claim denied by her predecessor Jeremy Hunt.

Companies face higher social security costs which, along with planned new protections for workers and an increased minimum wage, could undermine Labour's promises to turn Britain into the fastest-growing Group of Seven economy.

Polling firm Savanta said its measure of business optimism hit its lowest in October since Labour won power in July.

Keir Starmer and Rachel Reeves will likely be concerned how quickly years of goodwill among businesses appears to have dissipated, according to Matt McGinn, a consultant at Savanta.