Rachel Reeves Faces Dilemma: Income Tax Hike Considered Amid Deficit Crisis

British finance minister Rachel Reeves is contemplating raising income tax in the upcoming budget to address a 30 billion pound deficit. Despite conflicting with Labour's manifesto, options under consideration include increasing the basic rate of income tax. No final decision has been made.

British finance minister Rachel Reeves is reportedly contemplating an increase in income tax to tackle a multibillion-pound deficit, according to sources cited by The Guardian.

Reeves is facing a projected shortfall exceeding 30 billion pounds and is considering measures including changes to the basic tax rate, which could break a key Labour pledge not to raise income tax. Officials have yet to reach a final decision.

The current budget deficit of 71.8 billion pounds, up 17% from the previous year, and revisions in economic forecasts have prompted discussions on fiscal strategies ahead of the November 26 budget announcement.

(With inputs from agencies.)