Budget 2025 live: Reeves to unveil tax hike after appearing with red briefcase

After months of waiting, Rachel Reeves has been spotted visiting Number 11 with her iconic red briefcase ahead of the unveiling of her highly anticipated second budget.

The Chancellor is expected to extend the cap on personal tax allowances as she looks for revenue in the face of an expected slowdown in economic growth.

Changes to the minimum wage and sugar tax have already been announced.

She is now heading to the House of Commons, where she will present her second budget at 12.30 pm after months of speculation and newspaper leaks.

As we wait for Rachel Reeves to leave Number 11 this morning, a quick recap of what she said in a filmed address ahead of today’s Budget.

The Chancellor said the government had started to see results over the past year, with “wages growing faster than inflation, hospital waiting lists going down, and our economy growing faster and stronger than people expected”.

“But I know there is still more to do,” she said. “I know the cost of living is still taking a toll on family finances, I know people feel frustrated by the pace of change, or angry at the unfairness in our economy.

“I have to be honest that the damage caused by austerity, a chaotic Brexit and the pandemic was worse than we thought.

“But I’m not going to ignore those challenges, nor will I accept that our past will define our future. It doesn’t have to be that way.”

We’re hoping to see Rachel Reeves with the iconic red budget briefcase soon before she makes her statement at 12:30 p.m.

A distinctive red budget box has been used by Chancellors before budget speeches for over 100 years.

The first wooden box was hand-crafted for William Ewart Gladstone around 1860. It was made of black satin and covered with red leather.

The latest box was first used by George Osborne in 2011.

Independent Full Fact’s experts will be involved during today’s important budget speech.

Full Fact checks the facts about UK politics and explains the news, helping you understand the key issues and claims.

Rachel Reeves is expected to freeze the income tax threshold in her budget rather than raising it altogether.

By not raising the thresholds, it would benefit from a process called “fiscal drag”, where people are dragged into paying taxes for the first time or are shifted to a higher rate as wages rise.

The Institute for Fiscal Studies think tank estimates that a two-year extension of the current cap on the threshold would mean 960,000 more people paying income tax and 790,000 more people moving into the higher rate as their wages rise.

Should it be implemented with a cap on the national insurance cap, it could generate an estimated £8.3 billion annually for the Exchequer by 2029/30.

Amid criticism from the industry over the impact of the government’s first Budget last year, the state of the economy is the main focus ahead of the Budget.

Economists have predicted that a significant “fiscal gap” has widened since the last spending review, with smaller-than-expected spending cuts.

Recent data showed that borrowing stood at £17.4bn in October – higher than analysts’ forecast of around £15bn.

Nevertheless, reports have suggested that the original predictions of a fiscal gap of around £30 billion have now been reduced, with the Financial Times indicating that the OBR thinks it will be closer to £20 billion.

Carl Matchett, business and money editor of The Independent, reports:

One of the key figures to keep an eye on today will be the yield on ten-year government bonds – or gilts, as they are known.

This essentially reflects the return the government pays to borrow the money used for public spending etc., and is why so much focus has been focused on total debt levels (which Ms Reeves is trying to reduce) and borrowing costs (which send bonds higher due to policies the market doesn’t like).

When bonds are sold in large quantities, prices go down and yields go up – in other words, the government spends more money paying interest on the debt.

Just like if your mortgage or loan repayments increase, this is not an ideal situation as it means you have less money for new things or to increase investments in other areas of your life.

Currently the 10 year bond yield is at 4.50 percent.

It has increased by 0.16 percent over the previous day, but this is not an alarm or warning yet – it rose by about 4.53% yesterday evening but has gradually declined since then.

Also, for context, it has been higher for most of the past two weeks since some of the last rumors and suggestions surfaced about what tax hike we would get today, so again, the yield is on track for a 2.3% decline in one week.

David Maddox, political editor of The Independent, reports:

At last year’s Budget the Chancellor admitted that raising the income tax cap would break Labour’s manifesto promise not to raise income tax.

“I have come to the conclusion that raising the customs duty limit will hurt working people. It will take more money out of their pay slips. I am keeping every single promise on tax that I made in my manifesto,” she said.

Now she is going to break the limits and is trying to claim that she has not broken the promise of the election manifesto.

Budget 2025 is set to affect everything from ISA limits and National Insurance to pensions, property and savings.

With inflation still high and a fiscal deficit estimated at £30 billion, the government is under pressure, and homeowners, savers and investors alike may be feeling the impact. As Rachel Reeves reveals the full contents of her budget on November 26, personal finance expert Gabriel Nussbaum will weigh in on the details for readers to digest in a live quiz.

If you have a question for Gabriel, submit Here First Thursday 27th November at 1pm,