EconomicsTax & Spend

Reeves to Get Rare Budget Lifeline From Sticky UK Inflation

FacebookXLinkedInEmailLinkGiftExpandRachel ReevesPhotographer: Chris J. Ratcliffe/BloombergFacebookXLinkedInEmailLinkGiftGift this articleContact us:Provide news feedback or report an errorConfidential tip?Send a tip to our reportersSite feedback:Take our SurveyNew WindowFacebookXLinkedInEmailLinkGiftBy Tom ReesOctober 7, 2025 at 4:00 AM UTCBookmarkSave

With less than two months left to finalize her plans for patching up the UK’s multi-billion-pound budgetary black hole, Chancellor of the Exchequer Rachel Reeves is set to get help from an unlikely quarter: inflation.

Though dragging down affordability for everyday Britons, price rises are likely to have more beneficial effects on government tax receipts, according to a new analysis. By lifting the taxable value of incomes, profits and prices in cash terms, inflation will deliver a much-needed net £5 billion ($6.7 billion) boost to the chancellor’s plans.

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