The Chancellor has confirmed the date of her next Budget as she faces pressure to plug an up to £41 billion black hole in the public finances.
Rachel Reeves will present the Government's fiscal plans on November 26, the Treasury confirmed today, as the Chancellor admitted the economy is “not working well enough”.
It comes amid warnings that she will have to introduce new tax rises in a bid to steady the UK finances.
There are also suggestions that Sir Keir Starmer will seek to revive reforms to the benefits system, which were significantly scaled back following a backlash by Labour MPs earlier this year.
In a video posted on social media on Wednesday, Ms Reeves said: “Britain’s economy isn’t broken. But I know it’s not working well enough for working people.
“Bills are high. Getting ahead feels tougher. You put more in, get less out. That has to change.
“We’ve got huge potential - world-leading brands, dynamic industries, brilliant universities, and a skilled workforce. We’re a global hub for trade.
“Fixing the foundations has been my mission this past year... But I’m not satisfied. There’s more to do.”
A record 6.5 million Britons are now claiming jobless benefits – a number that has jumped by 500,000 since Labour came to power.
The Prime Minister is seeking to drive through further reforms to the welfare state following his No 10 reset, The Telegraph reported.
Sir Keir wants to overhaul disability benefits to get more people stuck on long-term sickness back into work.
Plans to do this were fiercely opposed by Labour backbench MPs earlier this year.
The UK spent £303.3 billion on welfare in the 2024/5, a figure ministers fear is unsustainable.
The scale of the challenge facing the Chancellor was illustrated by the NIESR economic think tank, which estimated Ms Reeves was set for a £41 billion shortfall on her self-imposed rule of balancing day-to-day spending with tax receipts in 2029-30.
Analysts have put the weakness in the UK bond market down to a reaction to the Prime Minister's reshuffle of his Downing Street team this week.
Sir Keir Starmer moved the Chancellor's deputy, Darren Jones, into a new role as chief secretary to the Prime Minister, which was interpreted by some as a blow to Ms Reeves' authority.
But Downing Street on Tuesday insisted the Chancellor's role was not diminished, saying Sir Keir and Ms Reeves spoke "at length over the summer about how these changes would bolster their joint approach to the growth agenda".
Ms Reeves added: “Cost of living pressures are still real.”
“And we must bring inflation and borrowing costs down by keeping a tight grip on day to day spending through our non-negotiable fiscal rules.
“It’s only by doing this can we afford to do the things we want to do.
“If renewal is our mission and growth is our challenge. Investment and reform are our tools.”
