UK's Reeves Confronts 'Impossible' Fiscal Choices Amid Budget Pressures, Think Tank Warns

London, August 5, 2025 — British Finance Minister Rachel Reeves faces a daunting dilemma as she prepares the upcoming budget, according to a prominent economic think tank. The National Institute of Economic and Social Research (NIESR) reports that Reeves must choose between implementing substantial tax increases, reducing public expenditure, or altering strict fiscal policies that she has previously upheld. The institute predicts that by the end of this year, the UK’s budget deficit could exceed projections by approximately 41 billion pounds ($54 billion), surpassing the target to balance current spending with tax revenue by the decade’s end. To restore a previous fiscal cushion of 9.9 billion pounds, Reeves might need to identify over 50 billion pounds in savings or additional revenue in the upcoming autumn budget. Reeves and Prime Minister Keir Starmer are navigating rising public demands for increased spending amid ongoing economic challenges. Last year, Reeves increased taxes by 40 billion pounds but has stated she will not pursue further hikes. While NIESR has revised its growth forecast for 2025 upwards to 1.3% from 1.2% in May, it has downgraded projections for subsequent...