What will be in chancellor Rachel Reeves plan? | Global News Avenue

The Prime Minister will provide the latest information on her plans for the UK economy when he makes a statement with the Economic Forecast on March 26.

Rachel Reeves had previously ruled out further tax increases but faced a difficult choice due to the performance of UK economy and world activity.

this Office of Budget Responsibility (OBR)Monitoring the government’s spending plans and performance will release its forecast for the UK economy on Wednesday, March 26.

It will also provide estimates about the cost of living in the family and whether it believes that the government will comply with its self-regulation on borrowing and spending.

Reeves will present the main findings of the regulator to parliament, which will make her feel for the rise of the economy.

After she spoke, the opposition could be conservative leader Kemi Badenoch or shadow minister Mel Stride, who would respond.

Reeves promises a major economic event every year – the budget – “makes stability of households and businesses and certainty in tax and expenditure changes.”

This means no large-scale policy announcement was issued on March 26, but this did not prevent it from being proposed in advance.

With poor performance in the economy and global factors, such as U.S. trade tariffs, indirectly affecting the UK, there is increasing speculation on whether the Prime Minister will violate her self-regulation on borrowing.

The OBR’s forecast is expected to confirm that the £9.9 billion financial buffer that meets its budget regulations has been phased out in the fiscal year 2029/30.

Reeves repeatedly said that her rules were “not negotiable.” Her two main rules are:

• No borrowing funds to provide funds for daily public expenditures
• At the end of this parliament, the share of debt as national income declines

The Treasury Department had drafted billions of pounds of spending cuts ahead of the spring statement.

understand Welfare spending is on the shooting line, but other government departments will see budgets as well.

The government is already concerned about the increase in the number of benefits for claimants and Reeves Previously, the “basic” reform of the welfare system was guaranteed.

The Ministry of Finance blames the global economic policy and geopolitical uncertainty over the outcome of Ukraine and the Middle East on the cost of government borrowing.

Other announcements that may be reporting include:

• Reduce tax-free annual cash ISA limit of £20,000 to encourage more people to invest their savings in stocks and stocks
• Details of confirming how international aid funds are redistributed to defense Prime Minister announces UK defence spending will rise to 2.5% of national income by 2027.

Government sources have been keen to point out that the incident is not a major activity because it will not include tax increases but only cuts in spending.

But if Reeves decides to extend the freeze to the threshold for people to start paying different income tax rates, a controversial hiking policy could be announced.

The policy is called a hidden tax rise or stealth tax because as people pay rises, people will take effect over time without the tax rate rising.

According to consulting firm Pantheon macroeconomics and investment bank Citi, the threshold has been frozen by the previous Conservative government until April 2025, but the Prime Minister can decide to extend the freeze to raise about £7 billion a year.

Reeves decided not to extend the threshold freeze in her first budget and thought that doing so would “harm workers” and “take more money from their paylips.”

Whether it is announcing any other spending cuts in the spring statement or in the June spending review, or even postponing to the next budget, remains to be seen.

Recent data show that the UK’s economic growth has been slow – not shrinking, but not growing as needed.

this The economy grew by just 0.1% between October and December 2024According to the latest official figures.

As the economy grows, more and more businesses can hire additional workers or raise wages. Companies that make higher profits also pay more taxes to the government, which can be used for public services.

In addition to slow growth, prices also rise faster than they want.

The current 3% inflation rate is higher than the Bank of England’s 2% target and is expected to be higher. Inflation can determine whether interest rates are lowered further than the current 4.5%.

Higher interest rates mean higher borrowing costs for loans, credit cards and mortgage transactions, but also provide better saving returns.

Business costs are expected to increase further in April as employers pay more National Insurance contributions. These can be passed on to the consumer.

The principal’s tax and expenditure plans have also increased Government finance surplus missed official forecastprompting economists to speculate that she could violate fiscal rules in matters.

The cost of borrowing in the UK soared in January, partly because concerns about the UK’s economic outlook threatened Reeves’ economic plans. The costs have since fallen, but are still higher than this time last year.

Reeves also warned that while tariffs are not directly targeting the UK, a potential global trade war will lower growth and increase inflation.