Client Update - 5th September 2025

I cannot decide if Rachel Reeves’ decision to announce the next UK budget date on the 26th November 2025 was a mere coincidence to fall on Wednesday this week, or whether Labour were actively trying to deflect the news flow away from Angela Rayner. The deputy Prime Minister is in a terrible state of disrepair following her known or unknown avoidance of £40,000 of stamp duty and the relocation of her main residence to a more Labour friendly area of the UK, cynics suggesting it will allow her to ride out the next election more safely. Rayner has been quick to explain a complicated personal situation has led to this error, a matter on which she had previously taken advice on, so with respect to the personal details, I will leave it there for now.

I have been away from writing this article for two weeks, and as always, so much has happened in such a brief period of time. The UK budget is indeed set for the 26th November and the steady and expected news flow over the summer on “leaked” details as to what Rachel Reeves may or may not do has been a little frustrating. Property taxes, Inheritance Tax, frozen thresholds and pensions have been on the agenda, however this week the Prime Minister did comment that the Welfare review would continue, perhaps giving an insight to a budget that will be more about cutting spending, than significantly higher taxation. Labour have focused on leaving the “average” worker unaffected, but with 35% of the UK income tax take coming from the 10% of highest earners, it is not clear how much more burden can be placed on the higher rate tax payers, without looking elsewhere.

With the UK tax take somewhere in the region of £950bn, almost 37% of GDP, the blackhole in UK finances desperately needs increased growth and therefore confidence in the economy to improve our rather dismal looking situation. This has seen UK Gilt yields rise to 27-year highs and currently the UK does not look particularly attractive to buyers in the debt market.

All of this comes on the back of Sir Kier Starmer’s reorganisation of his team in Downing Street, with the highlight being Darren Jones, formerly the chief secretary to the Treasury i.e. Rachel Reeves right hand man, moving into the Prime Minister’s newly created Chief Secretary role. This seems to underline an acknowledgement that economic expertise is required to stand alongside the Prime Minister, but who knows what the chancellor would have thought of this. As the FT wittingly reported this week “One problem is that Starmer’s operation increasingly resembles the Manchester United football team: it has a huge number of people with incredibly promising CVs and who have succeeded in the past. A number of people who have left it have gone on to succeed elsewhere. But it’s not clear that making the set-up work in the here and now can be achieved by changing the personnel — or if what really needs to change is the gaffer.” An interesting question indeed. Do have a good weekend.