Will your spending habits change if Rachel Reeves hikes taxes?

As UK budget day edges closer, the persistent chatter about tax hikes is growing ever-louder. Chancellor Rachel Reeves has already acknowledged that tax increases are on her radar but specific details remain light.

Analysts at Goldman Sachs (GS) recently said they expected Reeves to unveil a package of tax rises and spending cuts totalling around £30bn.

Meanwhile, the Institute for Fiscal Studies think-tank has encouraged Reeves to implement big tax increases to give the government more headroom to balance the books in the face of mounting debt and avoid rushed policy changes.

Read more: Reeves launches 'one-stop shop' to fast-track investment in the UK

Significant tax rises could inevitably spell trouble for many UK households who are already grappling with the higher cost of living or simply tightening their belts to avoid financial struggles down the line.

Although the UK economy grew slightly in August, there is still much long-term uncertainty, which has led to a slump in consumer confidence. This means that many households are being more cautious about spending and plan to delay big purchases.

Companies, many of which have reported lower profits as a result of the spending slowdown, may expect customers to absorb the cost of higher taxes that are imposed on them post-budget.

If Reeves does indeed hike taxes, are your spending plans likely to remain on track or will you be cutting back as a result? Vote in our poll below.

Yahoo UK's poll of the week lets you vote and indicate your strength of feeling on one of the week's hot topics. After the poll closes, we'll publish and analyse the results each Friday, giving readers the chance to see how polarising a topic has become and if their view chimes with other Yahoo UK readers.

Read more:

How to protect your finances amid chaotic market changes UK inflation to rise to highest in G7, warns IMF Why taxes will rise after the budget, and how to protect yourself

Download the Yahoo Finance app, available for Apple and Android.

View Comments