World Business Report Taxing more to cut the debt
Nov 26, 2025
In this discussion, Andrew Verity, a BBC economics correspondent, shares insights on the UK's £2.6 trillion debt and the recent £34 billion tax increases aimed at reducing it. He analyzes who will gain and lose from these tax changes, particularly pensioners and energy bill payers. Ross Mould, a market commentator from AJ Bell, explores market reactions, emphasizing how investors are responding positively to fiscal credibility. They also explore Australia's legal battle over social media use for teens and Iran's unusual fuel pricing changes.
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Tax Hikes To Tackle Large National Debt
- The UK has raised taxes significantly to pay down a net financial debt of £2.6tn, which equals 83% of GDP.
- Chancellor Rachel Reeves warned one in every £10 of government spending now goes on debt interest.
Freezes Act Like Hidden Tax Rises
- Freezing thresholds like the personal tax allowance effectively raise taxes over time through 'fiscal drag'.
- Andrew Verity noted that freezing allowances amounts to an effective increase in income tax rates and raises billions for the Treasury.
Winners And Losers In The Budget
- The budget had explicit winners and losers: pensioners and some energy bill reliefers win, while ordinary taxpayers shoulder most of the burden.
- High-value property surcharges target the wealthy but raise only modest sums.