UK Budget 2023: Businesses Brace for Tax Hikes Amid Economic Uncertainty
Published 23 November 2025
Highlights
- Chancellor Rachel Reeves is set to deliver the UK Budget on Wednesday, focusing on tax increases and spending cuts to address a £20bn financial gap.
- Businesses remain anxious due to previous tax hikes and potential new measures, with business rates and energy costs under scrutiny.
- Speculation and leaks about the Budget have been criticized for causing economic uncertainty, with calls for an investigation into pre-Budget leaks.
- Northern Ireland's Stormont faces a £400m overspend, with concerns about how the Budget will impact its financial commitments.
- Reeves aims to address the cost of living crisis, with potential measures including freezing income tax thresholds and introducing a wealth tax.
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UK Budget 2023: Businesses Brace for Tax Hikes Amid Economic Uncertainty
As Chancellor Rachel Reeves prepares to unveil the UK Budget on Wednesday, businesses and consumers are on edge, anticipating a series of tax increases and spending cuts aimed at filling a £20bn financial gap. The Budget comes at a time when business confidence is fragile, following last year's significant tax hikes, including a £25bn increase in National Insurance and a rise in the minimum wage.
Business Concerns and Economic Impact
Business leaders are particularly concerned about potential changes to business rates and energy costs. Many firms have seen their rates nearly double after pandemic-era discounts were reduced. The Chancellor has previously promised reform, which could include making existing discounts permanent and adjusting rates for larger retail properties. Additionally, the government is exploring ways to lower energy bills for 7,000 businesses.
Despite these concerns, the Bank of England is expected to counterbalance the Budget's fiscal tightening by lowering interest rates, potentially boosting borrowing and spending. However, research firm Capital Economics predicts the Budget could reduce GDP by 0.2% in 2026, a significant impact on an economy that grew just 0.1% in the third quarter of this year.
Speculation and Leaks
The lead-up to the Budget has been marred by speculation and leaks, which Transport Secretary Heidi Alexander denies have harmed the economy. Former Bank of England chief economist Andy Haldane criticized the leaks for causing "paralysis among businesses and consumers," while the Conservatives have called for an investigation into the leaks' impact on financial markets.
Stormont's Financial Challenges
In Northern Ireland, Finance Minister John O'Dowd highlighted a £400m overspend at Stormont, raising concerns about how the Budget will affect its financial commitments. O'Dowd emphasized the need for a balanced budget that supports workers and families while ensuring those with the broadest shoulders bear the burden of any tax increases.
Addressing the Cost of Living
Reeves has pledged to tackle the cost of living crisis, with measures potentially including freezing income tax thresholds and introducing a wealth tax. The Chancellor aims to provide relief to ordinary families while ensuring public finances remain sustainable. However, she faces criticism from various quarters, including calls for more substantial wealth taxes from Green Party leader Zack Polanski and Unite general secretary Sharon Graham.
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Scenario Analysis
The upcoming Budget could have significant implications for the UK economy and political landscape. If Reeves successfully balances tax increases with measures to stimulate growth, it could stabilize business confidence and support economic recovery. However, failure to address key concerns, such as business rates and the cost of living, could exacerbate economic challenges and fuel political opposition.
The handling of leaks and speculation may also impact the government's credibility and market confidence. A transparent and decisive Budget could restore trust, while continued uncertainty might hinder economic progress. As the Budget unfolds, stakeholders will be closely watching for signs of stability and growth in the UK's economic outlook.
As Chancellor Rachel Reeves prepares to unveil the UK Budget on Wednesday, businesses and consumers are on edge, anticipating a series of tax increases and spending cuts aimed at filling a £20bn financial gap. The Budget comes at a time when business confidence is fragile, following last year's significant tax hikes, including a £25bn increase in National Insurance and a rise in the minimum wage.
Business Concerns and Economic Impact
Business leaders are particularly concerned about potential changes to business rates and energy costs. Many firms have seen their rates nearly double after pandemic-era discounts were reduced. The Chancellor has previously promised reform, which could include making existing discounts permanent and adjusting rates for larger retail properties. Additionally, the government is exploring ways to lower energy bills for 7,000 businesses.
Despite these concerns, the Bank of England is expected to counterbalance the Budget's fiscal tightening by lowering interest rates, potentially boosting borrowing and spending. However, research firm Capital Economics predicts the Budget could reduce GDP by 0.2% in 2026, a significant impact on an economy that grew just 0.1% in the third quarter of this year.
Speculation and Leaks
The lead-up to the Budget has been marred by speculation and leaks, which Transport Secretary Heidi Alexander denies have harmed the economy. Former Bank of England chief economist Andy Haldane criticized the leaks for causing "paralysis among businesses and consumers," while the Conservatives have called for an investigation into the leaks' impact on financial markets.
Stormont's Financial Challenges
In Northern Ireland, Finance Minister John O'Dowd highlighted a £400m overspend at Stormont, raising concerns about how the Budget will affect its financial commitments. O'Dowd emphasized the need for a balanced budget that supports workers and families while ensuring those with the broadest shoulders bear the burden of any tax increases.
Addressing the Cost of Living
Reeves has pledged to tackle the cost of living crisis, with measures potentially including freezing income tax thresholds and introducing a wealth tax. The Chancellor aims to provide relief to ordinary families while ensuring public finances remain sustainable. However, she faces criticism from various quarters, including calls for more substantial wealth taxes from Green Party leader Zack Polanski and Unite general secretary Sharon Graham.
What this might mean
The upcoming Budget could have significant implications for the UK economy and political landscape. If Reeves successfully balances tax increases with measures to stimulate growth, it could stabilize business confidence and support economic recovery. However, failure to address key concerns, such as business rates and the cost of living, could exacerbate economic challenges and fuel political opposition.
The handling of leaks and speculation may also impact the government's credibility and market confidence. A transparent and decisive Budget could restore trust, while continued uncertainty might hinder economic progress. As the Budget unfolds, stakeholders will be closely watching for signs of stability and growth in the UK's economic outlook.
