LONDON (Reuters) -British finance minister Rachel Reeves is considering raising income tax in next month’s budget to help reduce a multibillion-pound deficit, The Guardian reported on Thursday, citing sources familiar with the matter.
The discussions come as Reeves faces an estimated shortfall of more than 30 billion pounds ($40.26 billion), the newspaper reported. It said Reeves is in active talks over whether to break one of Labour’s key manifesto pledges, which include not to raise income tax.
The Guardian said officials were weighing options including an increase in the basic rate of income tax or changes to thresholds, though no final decision has been made.
A Treasury spokesperson did not immediately respond to a Reuters request for comment.
Reeves wants to balance day-to-day spending with tax revenues by the end of the decade. The current budget deficit stood at 71.8 billion pounds in the April–September period, up 17% year-on-year.
She has also signalled a desire for a larger fiscal buffer than the 9.9 billion pounds previously outlined, which has been eroded by downgraded economic forecasts and higher borrowing costs.
Earlier this month, Reeves said she was looking at tax and spending measures for next month’s budget on November 26.
($1 = 0.7451 pounds)
(Reporting by Sam Tabahriti, Editing by Franklin Paul)
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