Rachel Reeves Faces Dilemma: Income Tax Hike Considered Amid Deficit Crisis

British finance minister Rachel Reeves is reportedly contemplating an increase in income tax to tackle a multibillion-pound deficit, according to sources cited by The Guardian.

Reeves is facing a projected shortfall exceeding 30 billion pounds and is considering measures including changes to the basic tax rate, which could break a key Labour pledge not to raise income tax. Officials have yet to reach a final decision.

The current budget deficit of 71.8 billion pounds, up 17% from the previous year, and revisions in economic forecasts have prompted discussions on fiscal strategies ahead of the November 26 budget announcement.