Does Britain Really Need £35bn of Tax Rises?

Does the UK need £35bn of tax rises at the 2026 Budget? The IFS Green Budget says Chancellor John Healey is £35bn short ahead of his first Budget on 28 October. Neil Woodford says the number rests on an interest rate nobody actually forecasts.

The Office for Budget Responsibility builds its own forecasts for UK growth, wages and inflation. For interest rates, it takes whatever the bond market happens to be pricing. Jon Adair explains what is really inside a market interest rate, why that price is not the same thing as a forecast, and the place in the IFS report where two different interest rate paths sit side by side.

Neil then puts his own numbers on UK growth, inflation, the Bank of England base rate and 10-year gilt yields, and explains why he thinks the OBR, the Bank of England, the IMF and the OECD keep getting the UK economy wrong. Jon puts the hard cases to him: oil above $100 with the Strait of Hormuz still shut, and whether the gilt market would punish a Chancellor who didn't raise taxes.

Then what it means for investors: which parts of the UK economy and the UK stock market Neil thinks gain most if he's right, and the one number to check on Budget day before you look at any tax rise.

This video is for information only and is not investment advice.