BUSINESS NEWS


Chancellor


Rachel Reeves will be aiming to plug a hole


in the Treasury’s finances in next month’s Budget


Trade braces for impact of tax hikes in Budget


Analysis: Outlook soured by forecast of stock market crash, says Ian Taylor


We may be five weeks away from the Budget on November 26, but it seems certain there is pain in store for households and probably businesses from tax rises. News last month that


government borrowing had outstripped forecasts by £11 billion only increased the pressure on chancellor Rachel Reeves, with economists suggesting she needs to plug a near £30 billion hole. Bond investors are urging Reeves


to allow more ‘headroom’ than the current £9.9 billion, leading to reports


48 23 OCTOBER 2025


the Treasury could double or triple that amount and take the sum the chancellor needs to raise beyond the £40 billion in the last Budget. To make matters worse, the Office


for Budget Responsibility (OBR) is set to downgrade its productivity forecast, with a mere 0.2% markdown costing about £18 billion a year. This would be sobering enough


without the Financial Times warning this month of a “market melt-up”, with “fund managers increasingly alarmed about everything”. It suggested “the AI hype cycle is holding up a lot of


sky right now” and warned “resurgent inflation would stop this exuberance in its tracks.” Both the Bank of England (BoE)


and International Monetary Fund also warned of a stock market crash last week as the AI boom drives valuations absurdly high. The BoE warned of a “sudden correction” and the IMF of an “abrupt” turn that “could drag down world growth”. Deloitte UK chief economist Ian


Continued on page 46 travelweekly.co.uk


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