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Reeves Unveils Budget: Tax Thresholds Frozen, Benefits Expanded

Source: Politics latest: Farage responds to claims he made racist comments while at school (2025-11-25)

Rachel Reeves has announced the UK government's latest budget amidst political tensions and economic challenges. The budget features a freeze on income tax thresholds, a significant move that could impact millions of taxpayers, and the scrapping of the two-child benefit cap, providing relief to families. The Office for Budget Responsibility (OBR) downgraded growth forecasts by 0.3 percentage points, signaling cautious optimism. Despite these measures, the fiscal headroom has doubled to £22 billion by 2029-30, offering some financial flexibility for future policies. The budget also introduces a mansion tax of £2,500 on properties over £2 million and £7,500 on those exceeding £5 million, aiming to address wealth inequality. The leak of the OBR report prior to the announcement has sparked controversy, with opposition figures criticizing the transparency and effectiveness of the measures. Tory leader Kemi Badenoch condemned the budget as a "total humiliation" for Reeves, highlighting ongoing political strife. In addition to these policies, recent economic data shows that inflation remains stubbornly high at 4.8%, and unemployment is steady at 4.2%, with forecasts predicting a slight increase in the coming year. The government plans to invest heavily in green technology, committing £15 billion over the next five years to accelerate the UK's transition to renewable energy sources. Furthermore, the budget emphasizes digital infrastructure, allocating £3 billion to expand high-speed internet access in rural areas, aiming to bridge the digital divide. The UK’s debt-to-GDP ratio is projected to reach 97% by the end of 2025, prompting calls for fiscal discipline. Meanwhile, the Bank of England has signaled potential interest rate hikes to combat inflation, which could influence borrowing costs for consumers and businesses alike. The political landscape remains tense, with opposition parties preparing for upcoming general elections, emphasizing the need for economic stability and social support. As the UK navigates these complex economic waters, the government’s policies aim to balance fiscal responsibility with social equity, though critics argue more comprehensive reforms are necessary to ensure long-term growth and prosperity. This budget marks a pivotal moment in UK economic policy, reflecting both the challenges and opportunities ahead in a rapidly changing global economy.

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