Rachel Reeves will raid your wallet AGAIN as new tax bombshell is all but confirmed!

By taxing and spending Rachel Reeves volition lone marque the UK's borrowing figures worse (Image: Getty)

On October 30, chancellor Rachel Reeves deed the UK system with £40billion worthy of taxes, and an other £31.5billion worthy of borrowing.

In doing so, she was taking a monolithic risk. Taxes volition compression economical growth, which has already collapsed nether Labour’s watch.

Borrowing adjacent much wealth volition thrust up the outgo of servicing our towering nationalist debt.

We knew things were atrocious but contiguous we've learned the UK finances are successful an adjacent worse authorities than we feared.

The UK borrowed a staggering £17.4billion successful October, the 2nd highest fig for the period since records began successful 1993.

That was mode supra the £12.3billion City economists had forecast.

In a further stroke to Reeves, much than fractional of that £17.4billion is made up of involvement repayments connected the UK’s nationalist debt.

We spent an unbelievable £9.1billion servicing our debts past month, the highest October fig connected record. What a discarded of payer currency that is.

Today, the UK owes £2.8 trillion. That's astir the aforesaid size arsenic our yearly economical output. Which is terrifying.

The fiscal crisis, which happened nether Labour, and the pandemic, which happened nether the Tories, are the main culprits. Both parties are to blame.

Reeves inherited the problem. However, it's her occupation to woody with it and since the predetermination she's made 1 blunder aft another, which are lone making things worse.

I'll support this little and sanction conscionable one. In her Budget, Reeves hiked employer's National Insurance (NI) charges by £25billion in a determination that volition destruct jobs, wages and growth.

It volition besides thrust ostentation backmost up. From 1.7% successful September to 3% adjacent year, according to the Bank of England. And that volition marque the outgo of servicing indebtedness involvement adjacent much onerous.

Alex Kerr, an economist astatine consultancy Capital Economics, is informing that if Reeves wants to summation spending "she whitethorn request to rise taxes to wage for it”.

Surprise, surprise.

Matt Swannell, main economical advisor to the EY Item Club, besides warns that Reeves whitethorn request to hike taxes again “if the taxation instrumentality disappoints oregon spending proves higher”.

Both present look inevitable to me.

Labour didn't travel into powerfulness to chopped nationalist services oregon authorities benefits, but arsenic we've seen, it's acceptable to hike taxes. Even though authorities spending makes up a grounds 45% of the UK economy.

There's a problem, though. As we’ll spot erstwhile the Budget NI hikes travel into unit adjacent April, Labour's taxes volition further destruct growth.

There was a fascinating nugget successful today's figures. Under the Tories, erstwhile chancellor Jeremy Hunt made 2 large cuts to idiosyncratic NI contributions.

These were expected to chopped Treasury taxation receipts. Except they didn't, according to the Office for National Statistics. The taxation instrumentality held up, arsenic radical felt amended off, spent a spot much money, boosted businesses, and got the system moving.

Reeves is taking the other approach. And erstwhile her adjacent taxation bombshell explodes, it'll inflict yet much harm connected jobs, wages, sentiment and growth. This can't extremity well.