Chancellor Rachel Reeves has abandoned plans to raise income tax after a surprise £10 billion improvement in the nation’s finances.
The UK’s budget deficit has narrowed from £30 billion to £20 billion following updated forecasts from the Office for Budget Responsibility.
With markets calm and borrowing costs easing, Reeves now aims to keep a £15 billion buffer instead of angering voters with higher rates.
Sources say she may still raise revenue by freezing tax thresholds and introducing selective levies.
A full rethink on taxing wealthy expats and limited liability partnerships is also being considered ahead of the next budget.
