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UK's Reeves says she hopes to avoid tax rises before next budget - Finance news and analysis from Global Banking & Finance Review
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UK's Reeves says she hopes to avoid tax rises before next budget

Published by Global Banking & Finance Review

Posted on June 16, 2026

1 min read

· Last updated: June 16, 2026

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UK's Rachel Reeves Aims to Avoid Tax Hikes Before Upcoming Budget

Rachel Reeves Discusses Fiscal Strategy and Defence Spending

Government's Fiscal Headroom and Tax Policy

LONDON, June 16 (Reuters) - British finance minister Rachel Reeves said on Tuesday she hoped to get to the next budget without raising taxes and that the government now had enough fiscal headroom to withstand economic shocks.

Increased Fiscal Headroom

"We made a decision to significantly increase the headroom against our fiscal rules," Reeves said at a Financial Times conference in London. "I believe that that was the right decision."

Defence Spending Plans

Upcoming Defence Investment Plan

She also signalled a further "uplift" in defence spending in the government's Defence Investment Plan, due to be published before NATO's summit in July.

Reporting and Editing Credits

(Reporting by Harry Robertson and Sarah Young, writing by Sam Tabahriti; editing by David Milliken)

Key Takeaways

  • Reeves highlighted that the government has bolstered its fiscal headroom and aims to avoid tax increases before the next budget — fiscal headroom rose to about £23.6 billion by 2029/30, up from ~£22 billion at last November’s budget update (lse.co.uk).
  • She indicated there would be an additional uplift in defence spending through the forthcoming Defence Investment Plan, to be published before the NATO summit in July (reddit.com).
  • The defence spending increase aligns with the UK’s broader commitment to boost NATO-related defence and security expenditure to 5% of GDP by 2035 (3.5% core defence + 1.5% resilience/security) (fullfact.org)

References

Frequently Asked Questions

Will the UK government raise taxes before the next budget?
Finance minister Rachel Reeves said she hopes to avoid raising taxes before the next budget.
What reason did Rachel Reeves give for not raising taxes?
Reeves cited increased fiscal headroom, which provides the government more flexibility to withstand economic shocks.
Is there a plan for increased UK defence spending?
Yes, Rachel Reeves indicated there will be an 'uplift' in defence spending, with details in the upcoming Defence Investment Plan.
When will the UK's Defence Investment Plan be published?
It is due to be published before NATO's summit in July.

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