Budget Day Overshadowed by Unprecedented Leak
Chancellor Rachel Reeves delivered her first major financial statement today amidst controversy after the Office for Budget Responsibility's assessment was accidentally published early. The shadow chancellor, Mel Stride, described the leak as "outrageous" while Reeves herself called it "deeply disappointing" and a "serious error" on the OBR's part.
Standing outside 11 Downing Street with her ministerial red box before the announcement, Reeves began her budget speech by addressing the unprecedented gaffe. She then outlined her vision for rebuilding Britain's economy, pointing to trade deals with the US, India and the EU, planning reforms, visa system overhauls and changes to fiscal rules that would raise public investment to its highest level in four decades.
Economic Forecasts and Fiscal Measures
The accidentally released OBR documents revealed significant changes to economic projections. Growth is now forecast at 1.5% for this year, up from the 1% predicted in March. However, subsequent years show downgrades with 1.4% growth next year and 1.5% annually until 2030 - below previous expectations of 1.7-1.9%.
Inflation projections have also been adjusted upwards, now expected to reach 3.5% this year compared to March's 3.2% forecast. Government borrowing figures show a challenging picture with £5.1bn expected for 2024/25, higher than the previous £4.8bn forecast.
Tax Changes and Industry Impact
In significant tax announcements, fuel duty will remain frozen until at least September 2026, continuing a policy that has been in place since 2010-11. The temporary 5p cut introduced in spring 2022 will begin to unwind after this period.
The budget delivered major changes to gambling taxation that sent shares in gambling companies plunging even before Reeves began speaking. Remote gaming duty will increase from 21% to 40% from April 2026, a move expected to raise £1.1bn by 2029/30. The government acknowledges this could push some customers toward illicit markets and make some businesses unprofitable.
Meanwhile, bingo duty of 10% has been abolished entirely, and a new online-only rate for general betting duty will rise to 25%, with traditional high street bookmakers maintaining the current 15% rate and special provisions for horse racing.
Reeves concluded her statement by reaffirming her commitments: "I said there would be no return to austerity and I meant it... I said I would cut the cost of living and I meant it... I said I would cut debt and borrowing and I meant it." The budget represents the first major economic statement from the new government, setting the tone for their approach to public finances amid challenging economic conditions.
