Reeves May Have to Scrap Tax Pledge, Says Ex-Bank of England Official
- Weale warns lower spending is not enough to stabilize UK debt
- Two rate cuts this year ‘makes sense’ after market moves
Britain’s Labour government may have to ditch its manifesto promise not to raise taxes on working people if market interest rates rise much further, according to former Bank of England rate-setter Martin Weale.
Speaking to Bloomberg Radio, Weale said he could see “some circumstances in which they will have to eat their words” such as “if interest rates rise considerably further.” Chancellor of the Exchequer Rachel Reeves would then be left with little option but to target VAT or income tax to stick to what she has called her “non-negotiable” fiscal rules.