Bloomberg Daybreak: Europe Edition Special Episode: Reeves Hikes Taxes After Budget Pre-Release Shambles
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Nov 26, 2025 Dan Hanson, Chief UK Economist at Bloomberg, breaks down the implications of the recent budget changes, revealing a £22 billion fiscal headroom amid new tax increases. Alex Wickham discusses the political fallout, suggesting short-term survival for the government, but questions their long-term strategy. Rosa Prince warns about the rising tax burden's impact on voters. Marcus Ashworth analyzes market reactions, marking a cautious relief while highlighting concerns over anti-growth measures. The panel debates critical issues like wealth taxes and political stability.
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OBR Pre-Release Upended The Choreography
- The OBR accidentally posted the budget's economic analysis before the Chancellor spoke, undermining the speech choreography.
- That pre-release created market confusion and forced immediate, detailed scrutiny of numbers rather than high-level messaging.
Headroom Boost Comes With Backloaded Pain
- The Chancellor gained about £22 billion of fiscal headroom largely because the OBR's forecast was less gloomy than feared.
- But many tax rises are backloaded, raising doubts about whether they will actually be implemented before an election.
OBR Forecast Moves Toward Realism
- The OBR's updated forecast lowered growth and nudged up inflation due to stronger wages, bringing it closer to consensus.
- That realism is positive for credibility but the policy choices still leave questions over durability and delivery.