Credit-rating companies have raised concerns over Chancellor of the Exchequer Rachel Reeves’ decision to push the bulk of her fiscal tightening to the end of the decade, casting doubt on whether the UK government will be able to deliver on its long-term budget commitments. Reeves’ plans, unveiled on Wednesday, rely heavily on delaying most tax rises and spending restraints until the 2028–29 fiscal year, with tax measures expected to reach £26 billion by 2029–30—timing that places the financial burden just before the latest possible date for the next general election, in August 2029.
S&P Global Ratings and Moody’s Ratings, both of which currently classify UK sovereign debt as high-quality with a stable outlook, questioned whether the chancellor’s backloaded strategy is realistic amid crumbling public support for the Labour government. Recent polls show Labour trailing significantly behind Nigel Farage’s Reform UK and also losing ground to the resurgent Green Party.
Moody’s warned that “execution risks remain high,” particularly given the difficulty of implementing sharp departmental spending cuts during an election year. Government projections now show real day-to-day departmental spending rising just 0.5% annually in both 2028–29 and 2029–30, down from nearly 1% previously. S&P echoed these concerns, noting that the proximity of substantial tax increases to the 2029 election could force ministers to reconsider the tightening plan as political pressure intensifies.
Reeves’ budget ranks among the UK’s largest tax-raising fiscal plans in modern history. According to data compiled since 1970 by the Office for Budget Responsibility, the Autumn Budget 2024 is projected to generate some of the highest revenues from tax measures by 2029–30, joining landmark budgets such as Norman Lamont’s 1993 consolidation and Denis Healey’s mid-1970s fiscal tightening. The chancellor extended the freeze on personal tax thresholds for another three years and introduced numerous tax increases to finance welfare spending, energy support and a strengthened fiscal buffer.
The political stakes for Reeves are high. After a turbulent first year back in government, Labour is struggling to regain the momentum that carried it to power. The scepticism from credit agencies follows a muted reaction from financial markets but a much more critical response from economists and major think tanks. Helen Miller, director of the Institute for Fiscal Studies, said Reeves’ plans would require “near-heroic restraint in an election year,” adding that the delayed tightening bears resemblance to the “fiscal fictions of recent years.”
With public confidence wavering and economic headwinds persisting, Reeves must now prove she can implement a budget whose most significant measures may collide directly with the political realities of an approaching general election.
