One expert predicted that the Government will hit the UK with £35billion’s worth of tax rises and £5billion in spending cuts.
Reeves is planning spending cuts and tax hikes (Image: Getty)
Chancellor Rachel Reeves’ reported Budget plans have made the markets nervous, according to reports.
Ms Reeves will unveil her economic plans in Parliament this afternoon as she looks to raise £40billion to try and spark a recovery for the UK.
But it has been widely reported that tax hikes and spending cuts are on the horizon, causing some concern about what could be announced.
Journalist Andrew Pierce posted on X on Wednesday: “UK borrowing costs have hit a post-election high on the eve of #Budget24…Markets nervous about @RachelReevesMP borrowing billions.”
Borrowing costs hit a post-election high after reports indicated that Ms Reeves plans to change Britain’s debt rules to release £50billion to invest in infrastructure.
The markets are bracing for the Budget (Image: Getty)
The yield on UK government bonds jumped up by about six basis points to trade above 4.2 percent last Thursday.
On Wednesday morning, the FTSE 100 fell in early trading ahead of the Budget. It was down 0.5%.
However, bond markets rallied to make the cost of Government borrowing lower.
The CBI’s latest figures show that private sector activity has fallen 4% in the last three months, showing the concern among businesses ahead of the Budget.
Amanda Tickel, head of tax and trade policy at Deloitte UK, told CNBC ahead of the Budget: “There’s a huge amount of interest in this Budget.
“I think because of the magnitude of the number, the breadth of taxes that haven’t been ruled out, and the fact that we’ve had 117 days now since Labour took office. We haven’t had a Labour government for 14 years, and they’re going to want to make their mark on the tax system.”
Ms Tickel predicted £35 billion worth of tax rises and £5billion in spending cuts.
Ms Reeves will unveil her Budget at 12:30pm on Wednesday.