Politics

Prime Minister Burnham declines to rule out tax increases in upcoming Budget

Facing constrained public finances and rising inflation, the prime minister says he will take a cautious fiscal approach ahead of October 28.

Updated Aug 25, 2026 · 02:17 UTC1 reports

The short version

Prime Minister Andy Burnham declined to rule out tax increases in the October 28 autumn Budget, describing the UK's public finances as being in a challenging state.
Burnham defended recent cost-of-living measures—including a £2 bus fare cap and lower VAT on electricity—stating they were financed by reprioritizing existing funds, such as delaying digital ID initiatives.
Official July data showed government borrowing exceeded forecasts alongside a four-month inflation peak of 2.9%, influenced by energy market pressures from conflict in Iran.
Economists warn that the government must increase taxes or cut spending to maintain its stated fiscal rules without expanding debt.

Prime Minister Andy Burnham declined to rule out tax increases for the autumn Budget scheduled for October 28.[BBC News]
Burnham stated that existing pledges, including a £2 bus fare cap and cut VAT on electricity, were funded by shifting money from lower priorities such as digital ID development.[BBC News]
Government borrowing for July exceeded official forecasts despite record monthly income tax receipts.[BBC News]
UK inflation rose to 2.9% in July, driven in part by energy and fuel cost increases linked to the war in Iran.[BBC News]
Burnham and Chancellor John Healey have committed to maintaining fiscal rules requiring day-to-day spending to be funded by tax revenue and reducing debt relative to GDP.[BBC News]

Specific tax or spending policy changes for the October 28 Budget have not yet been finalized or announced.[BBC News]
The precise funding mechanism for proposed long-term initiatives, such as social care reforms, remains unconfirmed.[BBC News]