Will the UK spending review lead to autumn tax rises? Yahoo Finance readers have their say
Chancellor Rachel Reeves delivered the UK spending review on Wednesday, sharing details of governmental budget plans for the next few years.
Key announcements included a £29bn per year increase in funding for the NHS, while the government's defence budget is set to increase from 2.3% to 2.6% of the country's gross domestic product (GDP) from 2027.
Reeves also shared details of a £39bn boost to funding for affordable housing and £15.6bn for transport projects in England's largest city regions outside of London.
'At the headline level, investors have been growing increasingly cynical about government spending plans and fiscal rules," said Lindsay James, investment strategist at Quilter.
Read more: Spending review: Rachel Reeves unveils more funding for schools, NHS and defence
"Shrinking fiscal headroom, leading to a round of tax increases and spending cuts has caused a growth slowdown, pushing a balanced budget even further out of reach."
"The high level of uncertainty around the next autumn budget, including what the shortfall will be and how it will inevitably be filled with tax rises, has also been weighing on growth," she added. "Yet the pressure to increase spending has continued, and today's spending review will have done little to quell fears that further tax rises are still to come."
Meanwhile, Myron Jobson, senior personal finance analyst at Interactive Investor, said that while the government's spending commitments "will be welcomed by many, they come at a time when the public finances remain under considerable strain.
Read more: Why Rachel Reeves' spending review may lead to tax rises
"Given the tight budget envelope, something will inevitably have to give," he said. "That could mean cuts in other areas, a rise in taxes — either directly or by stealth via the extension of frozen tax thresholds — or a combination of both."
"Ultimately, the cost of these pledges will need to be met, and the burden may fall more heavily on households already grappling with a rising cost of living," Jobson said.
Earlier this week, we asked Yahoo Finance UK readers if they believed that the spending review would lead to the government raising taxes in the autumn. We received 57 votes, with 74% of respondents believing that it would, while 9% disagreed and 17% were undecided on the matter.
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