British Prime Minister Keir Starmer on Wednesday declined to rule out a further extension of the income tax threshold freeze, as speculation intensifies ahead of finance minister Rachel Reeves’s budget next week.
Reeves is under pressure to raise tens of billions of pounds in her November 26 budget to meet her self-imposed fiscal rules. While a government source said on Nov. 14 that she has no intention of increasing income tax rates, she may still opt to prolong the freeze on the basic and higher-rate tax thresholds by an additional two years, taking it to 2030 — a move that could generate around £8 billion annually.
Pressed in the House of Commons on whether the thresholds would be frozen again, Starmer responded: “The budget is one week today and we will lay out our plans.”
Reeves previously acknowledged in her first budget last October that extending the freeze would breach Labour’s election manifesto promise not to raise taxes on “working people.” At the time, she stated: “From 2028–29, personal tax thresholds will be uprated in line with inflation once again.”
