13 Jun 2025Following the 2025 Spending Review, experts have warned that Chancellor Rachel Reeves will have to raise taxes in the Autumn Budget to fill a shortfall of up to £23 billion. Economists at Capital Economics warned that the government will need to hike taxes if it wants to avoid adversely affecting the markets. Ruth Gregory, Deputy Chief Economist at Capital Economics, stated that 'the tough decisions for the Chancellor didn't end' at the Spending Review. Other experts have suggested that tax relief on pensions could be targeted. Laith Khalaf, Financial Analyst at AJ Bell, said: 'Amid growing fiscal pressure, there's a real risk that pensions tax reform speculation, especially around tax-free cash and tax relief, will return to the headlines.' According to economists, the Chancellor will need to find further cuts or change fiscal rules. However, Ms Reeves remains steadfast in sticking to her 'non-negotiable' fiscal rules in order to ease investors' worries about rising borrowing levels. Ruth Curtis, Chief Executive of the Resolution Foundation, said: 'A weaker economic outlook and the unfunded changes to winter fuel payments mean the Chancellor will likely need to look again at tax rises in the autumn.' The Chancellor recently refused to rule out potential tax rises in the Autumn Budget. She commented: 'No Chancellor is able to write another four years of Budgets within a first year of government, you know how much uncertainty there is in the world at the moment.'