Economy ‘not working well enough’, says Reeves as she sets November 26 Budget

Rachel Reeves has acknowledged the economy is “not working well enough” and promised a “tight grip” on spending in her autumn Budget, which she will deliver on November 26.

The Chancellor set the date for her highly-anticipated Budget amid rampant speculation about tax rises and market jitters over the UK’s public finances.

Ms Reeves on Wednesday said she had asked the fiscal watchdog the Office for Budget Responsibility (OBR) to prepare an independent forecast on the late November date to accompany the Budget.

The Chancellor said she will prioritise curbing inflation and borrowing costs, keeping public spending under control by meeting her fiscal rules, and kick-starting economic growth.

She is widely expected to have to hike taxes to balance the books, with the relatively late Budget date giving her time to lay the groundwork for potential changes.

Concerns

Concerns over the public finances helped push UK long-term borrowing costs to 27-year highs ahead of the Budget date announcement.

Ms Reeves is expected to have to plug a black hole in the nation’s finances estimated by some to be as much as £51 billion.

But the yield on 30-year UK Government bonds – also known as gilts – eased back after the Treasury revealed the date of the major fiscal event.

This government will build an economy that works for working people, and rewards working people. pic.twitter.com/lAPR7RvX5Y

— Rachel Reeves (@RachelReevesMP) September 3, 2025

In a video on X, the Chancellor said: “Britain’s economy isn’t broken. But I know it’s not working well enough for working people.

“Bills are high. Getting ahead feels tougher. You put more in, get less out. That has to change.”

She said “fixing the foundations” has been her mission for the past year, and touted Government action including trade deals with the US, India and the EU and making a start on tearing up planning rules to reach the target to build 1.5 million homes.

“But I’m not satisfied,” she said. “There’s more to do. Cost-of-living pressures are still real.

“We must bring inflation and borrowing costs down by keeping a tight grip on day-to-day spending through our non-negotiable fiscal rules. It’s only by doing this can we afford to do the things we want to do.

“If renewal is our mission and growth is our challenge, investment and reform are our tools. The tools to building an economy that works for you – and rewards you. More pounds in your pocket. An NHS there when you need it. Opportunity for all.

“Those are my priorities. The priorities of the British people. And it is what I am determined to deliver.”

Announcements

Ms Reeves is expected to make a series of public announcements on productivity before the Budget.

The scale of the challenge facing the Chancellor was illustrated by the NIESR economic think tank saying last month that Ms Reeves is set for a £41 billion shortfall on her self-imposed rule of balancing day-to-day spending with tax receipts in 2029-30.

Although recent pressure on gilts came amid a bond sell-off globally, some analysts believe the weakness in the UK bond market was compounded by concerns over the Prime Minister’s reshuffle of his Downing Street team on Monday.

Sir Keir Starmer moved the Chancellor’s deputy, Darren Jones, into a new role as chief secretary to the Prime Minister, a change some interpreted as a blow to Ms Reeves’s authority.

But No 10 on Tuesday insisted the Chancellor’s role had not been diminished, saying Sir Keir and Ms Reeves spoke “at length over the summer about how these changes would bolster their joint approach to the growth agenda”.