Rachel Reeves faces the prospect of having to fill a large hole in the public finances. (Image: Getty)
An expert has suggested that Rachel Reeves announcing more tax hikes is inevitable, as Brits are warned to protect their wealth. Office for National Statistics (ONS) data shows that public sector borrowing reached £20.7billion last month — £3.5billion more than the £17.1billion forecast by the Office for Budget Responsibility (OBR) in March 2025, and the second-highest June net borrowing on record, after that of the pandemic era in 2020.
“This borrowing shock is the flashing red light on the dashboard,” Nigel Green, CEO of global finance firm deVere Group. “The UK is headed toward a fiscal squeeze, and the Chancellor has limited room to manoeuvre. That makes tax rises not just likely—but, in our view, inevitable.” He added: “Markets are already reacting. Gilts dropped and yields jumped, which is a clear signal that investors expect tougher measures ahead. And that usually means taxes—stealth or otherwise—will be deployed to stabilise the books.”
Nigel Green has said tax rises are guaranteed. (Image: Getty)
Mr Green also highlighted that debt interest payments nearly doubled year-on-year in June, and noted that pressure is mounting from Keir Starmer’s backbench MPs for wealth and tourist taxes.
This ensures that the direction of travel is now unambiguous, he argued.
“The political noise is getting louder,” Mr Green said. “Whether it’s capital gains, pension reliefs, property, or new forms of wealth taxation, something has to give.
“The Chancellor has ruled out reopening departmental budgets, which narrows the options dramatically.”
Ms Reeves is on a sticky wicket after successive U-turns from the Government, such as the abandonment of much of its welfare reforms.
The Chancellor will present her next Budget in the autumn. (Image: Getty)
She now has to eke out an estimated £30billion in her autumn Budget, this without breaking Labour’s election manifesto promise not to raise income tax, VAT or national insurance (NI).
Mr Green advised that investors, business owners and anyone with UK assets should not wait to react after the announcement.
“By the time tax policy changes are announced, it’s often too late to respond effectively,” he said.
“The smart move is to plan proactively—now. When fiscal gaps this size appear, governments act fast, and retrospectively.”
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Keir Starmer under pressure as 221 MPs make huge Palestine demand
Keir Starmer and David Lammy are under pressure (Image: Getty)
More than 220 MPs have urged Sir Keir Starmer to immediately recognise Palestine as a state.
Some 221 MPs, who span nine parties, wrote to the Prime Minister and Foreign Secretary David Lammy on Friday. The letter, organised by Sarah Champion MP who chairs the International Development Select Committee, comes ahead of an upcoming UN Conference in the United States next week.
It said: “We are expectant that the outcome of the conference will be the UK Government outlining when and how it will act on its long-standing commitment on a two-state solution; as well as how it will work with international partners to make this a reality.”
Parliamentarians from Labour, the Conservatives, Lib Dems, SNP, Greens, Plaid Cymru, SDLP and independents were among those who signed the letter. Senior signatories include Labour select committee chairs including Liam Byrne and Ruth Cadbury, and Lib Dem leader Sir Ed Davey.
But a Cabinet minister defended the Government’s resistance to calls for the UK to recognise a Palestinian state immediately amid mounting global anger over the starving population in Gaza.
Read more: Britain should evacuate critically injured children from Gaza to UK, MPs say
Read more: Keir Starmer finally speaks out on Gaza as he calls emergency meeting
Technology Secretary Peter Kyle insisted Prime Minister Sir Keir Starmer wants sovereignty agreed “more than anyone” but said the status must be reached as part of a political process.
It comes amid calls from both opposition critics and Labour ranks for the Government to support statehood after France became the biggest and most powerful European country to recognise Palestine.
Speaking to broadcasters, Mr Kyle said the road to sovereignty was “in the gift of Palestine and Israel” through ceasefire negotiations, adding that Britain’s immediate focus was on helping to restore aid to Gaza.
“Keir Starmer wants this more than anyone else, but believes it is a crucial step towards delivering the peace and security into the future, and needs to be a negotiated peace within the region itself. It can’t be forced,” he told Sky News.
“We want Palestinian statehood. We desire it, and we want to make sure the circumstances can exist where that kind of long-term political solution can have the space to evolve and make sure that it can become a permanent circumstance that can bring peace to the entire region.
Downing Street has faced growing pressure over its stance on Palestinian statehood since French President Emmanuel Macron made his country the first G7 nation to recognise sovereignty.
He said he would formalise the move at the UN General Assembly in September.
But right now, today, we’ve got to focus on what will ease the suffering, and it is extreme, unwarranted suffering in Gaza that has to be the priority for us today.”
On Friday evening, the Prime Minister said: “The appalling scenes in Gaza are unrelenting. The continued captivity of hostages, the starvation and denial of humanitarian aid to the Palestinian people, the increasing violence from extremist settler groups, and Israel’s disproportionate military escalation in Gaza are all indefensible.
“Alongside our closest allies, I am working on a pathway to peace in the region, focused on the practical solutions that will make a real difference to the lives of those that are suffering in this war.
“That pathway will set out the concrete steps needed to turn the ceasefire so desperately needed, into a lasting peace.
“Recognition of a Palestinian state has to be one of those steps. I am unequivocal about that. But it must be part of a wider plan which ultimately results in a two-state solution and lasting security for Palestinians and Israelis. This is the way to ensure it is a tool of maximum utility to improve the lives of those who are suffering – which of course, will always be our ultimate goal.”
