The government ‘black hole’ which could see your taxes start to rise

• The National Institute of Economic and Social Research (NIESR) has warned that Chancellor Rachel Reeves faces a £41 billion shortfall in public finances.
• This deficit, projected by 2029-30, is attributed to Labour's policy reversals, increased borrowing, and sluggish economic growth.
• NIESR suggests the Chancellor must either raise taxes, cut public spending, or abandon her fiscal rules to address the 'impossible trilemma' of balancing commitments.
• Tax increases are considered the more probable solution, with NIESR highlighting that the poorest 10 per cent of households have already experienced a 1.3 per cent drop in living standards under Labour.
• The think tank also noted that the Chancellor's current £9.9 billion financial buffer is insufficient and proposed a potential rewrite of the government's fiscal rules.

IN FULL

Reeves warned she must raise taxes or cut spending to plug £41bn black hole