UK needs big tax rises to avoid second Liz Truss episode, think

By David Milliken

LONDON (Reuters) -British finance minister Rachel Reeves needs to embark on major tax rises in her November 26 budget or risk a repeat of the loss of market confidence that cost former prime minister Liz Truss her job, a leading think-tank said on Wednesday.

The National Institute of Economic and Social Research said Reeves should build 30 billion pounds ($40 billion) of margin for error against economic shocks, up from 10 billion at her last budget.

Combined with a likely 20-30-billion pound downgrade to Britain’s fiscal outlook by the government’s Office for Budget Responsibility, that makes a fiscal consolidation of 50 billion pounds necessary, it added.

As Reeves had set out long-term spending plans in June, the bulk of this would need to come from tax rises.

“It