With the Autumn Budget set for 26 November, former UK chancellor Jeremy Hunt warned that Chancellor Rachel Reeves faces a “black hole” of up to £50bn in public finances.
Speaking at the Guinness Global Investors Annual Conference in London, Hunt said:
- “The main issue for the government is the high level of debt… That’s why it will be a very difficult budget. And the job has become a lot harder.”
- He added that Reeves must balance borrowing against tax rises, stressing: “To increase spending, tax has to be raised and to cut spending, taxes can fall.”
- Hunt cautioned that Britain must get debt under control, noting: “France is already in a catastrophic situation with its high level of debt. While Germany can afford to increase its debt. The US also has high debt levels.”
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Signals tight fiscal outlook as Labour navigates growth and spending pressures. Market-impact:
Gilts: Warning of tough fiscal stance could weigh on demand if tax hikes bite growth
GBP: Prospects of higher taxes may temper sterling, though credibility on debt is supportive
Equities: Consumer sectors vulnerable to tax hikes; investors wary of reduced disposable incomes
