Rachel Reeves is under mounting pressure to resign after new figures revealed she may have dramatically overstated the size of Britain’s so-called “black hole” ahead of November’s Budget.
The Chancellor repeatedly warned the public that “tough decisions” were coming because the UK was facing a £30 billion gap in the public finances — a claim she used to justify tax rises and warnings of national belt-tightening. She also suggested the Office for Budget Responsibility (OBR) was preparing to downgrade Britain’s productivity outlook.
However, the OBR has confirmed it told the Treasury on September 17 that the real figure was just £2.5 billion — less than a tenth of what Reeves claimed. In a letter to the Treasury Committee, OBR chairman Richard Hughes said that “at no point” did the Chancellor face a black hole larger than £2.5bn.
By October 31, the watchdog said the shortfall had disappeared entirely and been replaced by a £4.2bn surplus.
Four days after that, Reeves delivered a pre-Budget Downing Street address insisting poor productivity would “have consequences for the public finances” and that families would need to “do their bit” to plug the gap. “I’m being honest with people,” she said at the time.
Today’s Budget was a total humiliation for Rachel Reeves. She will go down as the worst Chancellor this country has ever had.
— Kemi Badenoch (@KemiBadenoch) November 26, 2025
Her position is now untenable and she knows it👇 pic.twitter.com/DnidHwI6p2
The revelation has sparked a fierce political backlash, with critics accusing her of misleading Parliament, alarming the public and spooking markets.
Reform UK’s deputy leader Richard Tice accused her of having “deliberately scared businesses, consumers and the markets” in the run-up to the Budget. “She has deliberately crashed the economy and must now consider her position,” he said.
Conservative Cabinet minister Kemi Badenoch went further, calling Reeves “shameful” and accusing her of “lying to the public”. “Yet more evidence, as if we needed it, that the Chancellor must be sacked,” she said. “For months, Ms Reeves has lied to the public to justify record tax hikes to pay for more welfare.”
Questions have also been raised over Reeves’ brief proposal to raise income tax. In her pre-Budget briefing she said she was being “forced” to do so, but scrapped the plan the following week. Sources claimed this was due to an OBR upgrade — yet the watchdog confirmed it had issued no new forecast between the briefing and the U-turn.
The Treasury defended the Chancellor, saying: “We’re not going to get into the OBR’s processes or speculate on how that relates to internal decision-making. The Chancellor made her choices to cut the cost of living, cut hospital waiting lists and double headroom to cut the cost of our debt. It’s important to preserve a private space for Treasury-OBR policy and forecast discussions.”
