Reeves' Tax Tsunami: Budget 2025 Delivers £26bn Sting – Growth Gutted, Taxpayers Tormented, and Britain Broke-er Than Ever!

 

Rachel Reeves has just unleashed her much leaked late Autumn Budget 2025 like a wrecking ball at a glass factory – £26 billion in tax hikes crashing down on workers, savers, and investors, all while the Office for Budget Responsibility (OBR) quietly downgrades growth forecasts to levels that make the 1970s Winter of Discontent look like a balmy barbecue. Delivered today, November 26, 2025, this fiscal fiasco isn't "fixing the foundations" as Starmer's spin machine claims – it's fracking the economy for short-term scraps, leaving taxpayers poorer, businesses battered, and growth on life support.

Hold onto your wallets, folks: the OBR's leaked-then-confirmed Economic and Fiscal Outlook paints a picture of stagnation so severe it's got economists reaching for the smelling salts. GDP growth? Upgraded to a measly 1.5% for 2025 (from 1% in March – whoop-de-doo), but that's before the tax torpedo hits. Productivity? Slashed to 1.0% medium-term growth, 0.3 points slower than hoped, dragging borrowing up by £7bn per 0.1% slip. Tax as GDP share? A post-war peak of 38.3% – the highest since Churchill was chain-smoking in the war rooms. Welcome to Labour's "renewal": more red tape, less rocket fuel.

The Key Carnage: £26bn Tax Raid – Who's Getting Hammered?

Reeves' big swing? A cocktail of stealth taxes and outright grabs designed to plug the black hole she blames on Tory "mismanagement" (pot, kettle, anyone?). Total haul: £26.1bn by 2029-30, freezing thresholds and tweaking rates to suck in 920,000 extra higher-rate taxpayers. No mercy for the middle class – this is fiscal drag on steroids, where inflation pushes you into higher bands without a penny raise.

Here's the hit list, straight from the red box of doom:

1. Frozen Personal Allowances & Thresholds: Basic rate band stuck till 2029 – if you're earning £12,571-£50,270, kiss goodbye to £1,200 extra tax per year as wages rise with inflation. Higher earners? Bam – 40% band kicks in at lower real terms. Result: 920,000 more in the 40% club, pure stealth squeeze.
2. National Insurance Nightmare: Employer NI up 1.2% to 15%, plus lower threshold – that's a jobs tax hammering businesses, who'll pass it straight to you via frozen wages or pink slips. OBR says it'll "weigh on growth" for years.
3. Dividend Tax Spike: Rates up 2 points across the board – basic from 8.75% to 10.75%, higher from 33.75% to 35.75%. Investors and small biz owners? Your side-hustle dividends just got devoured.
4. Pension Predation: Annual allowance trimmed, lifetime allowance revived – savers over £1m? Expect a 55% tax whack on drawdowns. Reeves calls it "fairness"; I call it raiding your retirement rainy-day fund.
5. Mansion Tax on the Mega-Rich: 2% stamp duty surcharge on homes over £500k for non-residents – good luck enforcing that without scaring off foreign buyers and tanking London prices.
6. VAPE & Booze Levy: Sin taxes on vapes (£2.20 per 10ml bottle) and a 6.7% cider duty hike – "health" my foot, it's just another fag on your Friday pint.
7. Electric Car Killer: Scrappage of EV incentives – OBR warns it'll "discourage take-up," slashing green growth while raising £1.9bn long-term from road taxes.

Spending side? A crumbly £5bn "national renewal fund" for infrastructure (yawn – we've heard that before), plus lower energy bills via windfall taxes on oil giants. But here's the kicker: spending as GDP share jumps to 45% next year before dipping back – that's 5 points above pre-Covid, all funded by... you guessed it, your wallet.

What It Means for the Economy: Drag, Decline, and a Dash of Despair

For the economy? This Budget's a brake pedal mashed to the floor. OBR's crystal ball: borrowing tumbles from 4.5% GDP in 2025-26 to 1.9% by 2030-31 (lowest in six years, Reeves crows), debt peaks at 97% GDP in 2028-29 then eases to 96.1%. Sounds peachy? Nah – that's after £26bn in growth-gutting taxes. Cumulative nominal GDP growth from 2025-30? 0.9 points lower than March, skewed to labour income over profits (businesses fleeing already).

• Growth Drag: NI hikes and freezes = investment strike. OBR: "Persistent weakness in labour market and productivity" – unemployment up, vacancies weirdly rising, inflation at 3.6% (from 1.7% low). UK's now G7 laggard, per forecasts.
• Inflation Irony: Tax rises shave 0.3 points off CPI in 2026, but higher energy duties? They'll bite back.
• Debt Dud: Primary surplus by 2027-28 (first since 2001), but each productivity blip adds £7bn borrowing. Public sector net worth? Improves a smidge to -68% GDP by 2030 – still a black hole bigger than Blackpool Sands.

Bottom line: Reeves' "plan" trades short-term fiscal flex for long-term limp. Britain grows 5.3% since Covid, but per head? Just 0.8% – this Budget bakes in more of the same.

Taxpayers Tormented: Where You'll Feel the Freeze (And How to Fight Back)

Ordinary punters? You're the big losers here – no income tax rise, sure, but the stealth stuff stings worse. Families: two-child benefit cap scrapped (huzzah, £2.5bn for 400k kids), but frozen thresholds mean £500-£1,000 extra tax per household. Workers: NI drag = wage stagnation, 1.5m more in poverty per OBR. Savers/Investors: Dividend and pension hits = £500m annual raid on your nest egg. Pensioners: Triple lock safe, but inheritance tax tweaks loom (non-dom crackdown).

Worse off? Middle earners (£30k-£60k) – fiscal drag turns pay rises into pain. Businesses: Compliance costs up 10%, hiring down 2%. Even the rich feel the pinch on EVs and vapes. Good news? Lower borrowing means... er, marginally cheaper mortgages? Small mercies.

Shield Your Shillings: Grab These Lifelines Before Reeves Raids 'Em Next

While the Chancellor's busy cooking the books, savvy Loanbuster readers are battening down: diversifying investments, maxing tax wrappers, and arming up with intel. Here's your starter pack – click through and protect what Reeves can't touch:

• Master the tax dodge basics: The Tax-Free Wealth by Tom Wheelwright – blueprint for keeping HMRC at bay amid freezes and hikes. Snag it on Amazon
• Pension-proof your future: The Simple Path to Wealth by JL Collins – idiot-proof guide to index funds and beating the allowance squeeze. Essential now
• Investor armoury: The Intelligent Investor by Benjamin Graham – timeless tactics against dividend doom. Warren Buffett's bibl:

Shift to ISAs, eye dividend alternatives, and track every receipt – before the next Budget bazooka.

The Bitter Bottom Line: Labour's Legacy? A Leaner Wallet for All

Rachel Reeves' Budget 2025 isn't renewal – it's a rude awakening. £26bn tax tsunami, growth downgraded, taxpayers twisted. Borrowing falls, sure, but at what cost? A slower, smaller economy where you're working harder for less, while ministers pat themselves on the back for "stability."

Britain deserves better than this managed misery. Share this if you're fuming, grab those books to fight back, and let's hope the 2029 election brings a real reset. Until then, stay sharp – or get sheared.

Mortgages To Rise to 5% by 2029

 

 

Anyone with a mortgage ha better start paying it down. 

 

Budget leak (par 2.57) shows interest rate on mortgages will go UP from 3.7% in 2024 to 5% in 2029.

 

OBR leak doc. 

The OBR is Shite!

Tin Hats Everyone!

OBR Bombshell: Reeves’ Britain Now Officially on Course for the Most Miserable Growth Forecast Since… Well, EVER!

Hold the front page, folks – the Office for Budget Responsibility has just taken a flamethrower to Rachel Reeves’ “decade of renewal” fantasy and torched every single growth forecast for this entire parliament. Yes, you read that right: slower growth in 2025, 2026, 2027, 2028, and 2029 than they thought just eight months ago. That’s not a “revision”, that’s a full-blown economic obituary penned by the government’s own independent watchdog.

Welcome to Stagnation-on-Steroids 2.0 – now with extra misery sprinkles!

The OBR’s latest Economic and Fiscal Outlook dropped yesterday like a lead balloon in a paddling pool, and the numbers are so grim they make the Truss mini-budget chaos look like a minor hiccup at a village fete.

• 2025 growth slashed from 2.0% to a pathetic 1.1%
• 2026 cut from 2.0% to a limp 1.0%
• 2027 down from 1.9% to 1.3%
• 2028 and 2029 both trimmed to levels that wouldn’t get a hamster excited

Translation: the British economy is now forecast to grow slower under Labour than it did under the last five years of Tory austerity, Covid, and Brexit combined. Let that sink in while you’re queuing for the food bank you never thought you’d need.

How Did We Get Here? Let Me Count the Reeves Ways…

1. £40 billion tax raid on jobs (hello, National Insurance hike – the tax on work)
2. Crushing business confidence faster than you can say “investment strike”
3. A Budget that even the OBR says will “weigh on growth” for years
4. Energy prices kept artificially high because, well, Net Zero virtue signalling doesn’t pay the bills
5. Public sector “investment” that somehow never translates into actual productivity

The OBR politely calls it “persistent weakness in the labour market and lower productivity growth”. I call it a self-inflicted wound delivered by a Chancellor who thinks wealth creation is something you tax into existence.

The Really Terrifying Bit They Don’t Want You to Notice

Buried on page 87 of the report: the OBR now thinks potential output – the speed limit of the economy – has been permanently scarred. That’s economist-speak for “Britain just got poorer forever because Labour scared the investors away”.

Remember when Sir Keir Starmer promised “the fastest growth in the G7”? Turns out that was just the fastest growth in fairy tales. Britain is now officially projected to be the slowest-growing economy in the G7 for the next two years. Congratulations, comrades – mission accomplished!

What Should You Do Before the Next Budget Hammer Blow?

While Reeves is busy rewriting economic reality, here’s what smart readers are doing right now:

• Protecting what little wealth they have left 
• Diversifying out of sterling before the pound gets another kicking
• Stockpiling anything that isn’t nailed down by HMRC

Protect Yourself Before the Next Hammer Blow Lands

While Reeves rewrites economic reality with all the finesse of a bull in a china shop, here's what my sharp-eyed readers are doing right now to batten down the hatches:

• Arming up with battle-tested guides to outfox the fiscal fools: Snag The Tax-Free Wealth by Tom Wheelwright – the ultimate playbook for keeping HMRC's mitts off your hard-earned brass (a bestseller that's saved more fortunes than Starmer's got excuses). Grab it here on Amazon: link

• For a proper chuckle amid the chaos (because laughter's the best tax dodge), dive into Death by Bureaucracy by Kenneth J. Glassman – eviscerates government waste like I do Reeves, but with footnotes. Your copy awaits: link

• And don't sleep on The Deficit Myth by Stephanie Kelton – skewers the "broke government" bollocks from a MMT angle that'll have you rethinking (and protecting) every penny. Essential reading: link

• Shifting savings out of sterling before the pound takes another pasting

• Hoarding anything that isn't yet on the Chancellor's chopping block

These aren't just books – they're your financial flak jackets. Click through, buy smart, and let's turn those OBR downgrades into someone else's problem. 

The Final Nail

The OBR has just confirmed what anyone with a calculator already knew: Labour’s “plan for growth” is the economic equivalent of putting diesel in a Formula 1 car and wondering why it’s going backwards.

Five years of downgrades. Five years of excuses. Five years of watching your living standards evaporate while ministers tell you it’s all “global headwinds” (funny how France and Germany are managing just fine, eh?).

Britain didn’t vote for decline. But decline is exactly what this government is delivering – and now even their own referee has blown the whistle.

Wake up, Britain. Before there’s nothing left to wake up to.

UK GDP Sputters to a Woeful 0.1% in Q3 2025: JLR Hack Takes the Blame, But Don't Kid Yourselves – It's Reeves' Tax Fiasco That's the Real Economy Killer

Blimey, what a shower. Just when you thought the UK's economic woes couldn't get any more farcical, today's Office for National Statistics (ONS) figures land like a damp squib on Bonfire Night. GDP growth for the third quarter – that's July to September 2025 – clocked in at a pathetic 0.1%, barely enough to register on the national misery index. And if that wasn't grim enough, September alone saw the economy shrink by 0.1%, following a flatline in August. We're talking stagnation on steroids, folks – the sort of "growth" that makes you wonder if the bean-counters in Whitehall have been at the sherry.

Now, the chattering classes are pointing fingers at the cyber hack that crippled Jaguar Land Rover (JLR) over the summer. Fair dos, it was a belter of a blunder: hackers shut down production for weeks, costing the economy a cool £1.9 billion and rippling out to over 5,000 organisations. Manufacturing output took a nosedive, dragging the whole shebang down like a lead balloon in a gale. Some boffins reckon it shaved a full percentage point off quarterly growth – extraordinary, innit? But let's not get carried away with the excuses. For the UK's vaunted economy to hinge on one car firm churning out posh wheels for the toffs? That's not resilience; that's a right laughable house of cards. We've got North Sea oil ghosts in our past, and now we're betting the farm on luxury SUVs? Pathetic doesn't even cover it. Time to diversify, lads, before the next spot of bother leaves us all skint.

And here's the rub: this isn't some freak cyber blip. Growth's been utter tripe for yonks. Remember the heady days of early 2025? We were crowing about 0.9% in the first half, but that's ancient history now. The ONS reckons the three months to September saw a measly 1.3% uptick year-on-year, but strip out the fluff and it's clear – we're limping along on life support. Wages stagnant, unemployment ticking up, and a cost-of-living squeeze that's got households choosing between the leccy bill and a decent cuppa. It's the same old story: promises of green shoots turning to withered weeds before your eyes.

Enter stage left: Rachel Reeves, the Iron Chancellor who's about as cuddly as a tax demand on Christmas Eve. Her fiscal wizardry? More like a sleight-of-hand that picks your pocket while promising jam tomorrow. Those tax hikes she's been brewing – NI contributions jacked from 13.8% to 15%, whispers of income tax fiddles, and a clampdown on pension perks – are set to choke investment and hobble growth like a three-legged race at the village fete. The EY Item Club's crystal ball doesn't lie: expect sub-1% growth in 2026, thanks to businesses battening down the hatches rather than splashing the cash. Reeves bangs on about "fixing the foundations," but all I see is her shovelling more sand into the cracks. Labour's inheritance tax was meant to be a "one-off," my eye – now we're staring down the barrel of more pain in the Autumn Budget on 26 November. No wonder the CBI's moaning about a "fragile recovery" on the brink of flatlining.

Worse still, zoom in on the per-head figures, and it's a proper gut-punch. UK GDP per capita's hovering around $54,280 for 2025 – that's peanuts compared to the Eurocrats in Germany at $59,930, and we've slipped behind the pack in the G7 league table. With population ticking up and productivity in the doldrums, every man, woman, and child is effectively getting a smaller slice of the pie. It's not just lousy growth; it's lousy growth per person, meaning the average punter's worse off than they were a decade ago. Reeves' tax policies aren't mending the roof – they're kicking the ladder away from the rest of us.

So, where does that leave us? Scratching our heads, tightening belts, and eyeing the exit from this endless loop of mediocrity. If the JLR hack's a wake-up call, fine – but let's not scapegoat silicon bandits when the real villains are in No.11, wielding the red pen like it's Excalibur. Time for some proper grown-up economics, not this reheated austerity with a side of greenwash.

Fancy arming yourself against the next fiscal fiasco? Pop over to Amazon and snag a copy of The Deficit Myth by Stephanie Kelton – it'll blow the lid off why we're all skint despite the spin. (Affiliate link: Buy now on Amazon – your purchase helps keep Loanbuster ticking without adding to the national debt.) Or if you're after a laugh amid the gloom, Freakonomics by Levitt and Dubner is a belter for spotting the daft incentives driving this mess.

What do you reckon – is Reeves for the high jump, or are we stuck with this lot? Drop a comment below, and let's chew the fat.

Ken Frost is the editor of Loanbuster and a veteran scribbler on all things fiscal folly. Follow the madness at www.kenfrost.net.