Reeves backs away from income tax rates rise after improved economic forecasts
3 days ago Share Save Faisal Islam, Economics editor , Chris Mason, Political editor and Kate Whannel, Political reporter Share Save
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Rachel Reeves has decided against raising income tax rates at the Budget after receiving better-than-expected economic forecasts, government sources have said. In recent weeks, the chancellor had given strong indications she would increase the tax - a move that would have broken Labour's election promise not to raise "the basic, higher or additional rates of income tax". However, as first reported in the Financial Times, the chancellor has decided not to proceed following estimates suggesting a gap in the public finances is £10bn smaller than previously thought. Instead of raising rates, Reeves could opt to freeze or lower income tax thresholds, the salary levels at which the rates kick in.
Other taxes could also be raised and government sources maintain they are still having to make what they call "tough
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