UK Chancellor Hints at Tax Rises as Government Faces "Hard Choices" Ahead

Rachel Reeves Warns of Harder Choices to Come as She Hints at Tax Rises LONDON (AP) - In a speech at Labour's annual party conference in Liverpool, Chancellor Rachel Reeves warned that the government is facing difficult choices and hinted at further tax rises in November's Budget. Reeves pledged to keep "taxes, inflation and interest rates as low as possible," but acknowledged that international events have made her job harder. She pointed to wars in Europe and the Middle East, US tariffs, and the global cost of borrowing as factors that have changed the economic landscape. "We're not immune to any of those things," Reeves said in a BBC interview ahead of her speech. "The world has changed in the last year." Reeves is facing a challenging Budget, with economists warning that tax rises or spending cuts will be needed for her to meet her self-imposed borrowing rules. The Chancellor's comments on Wednesday prepared the ground for the government's argument for why tax increases may be necessary. In the past, the UK has implemented policies such as scrapping child benefit to reduce public expenditure. Reeves' warning of harder choices ahead suggests that similar measures could be on the table in November. The global economic context is critical in understanding the Chancellor's decision-making process. The ongoing conflicts in Ukraine and Syria have led to a surge in energy prices, while US tariffs have disrupted trade flows. These factors have contributed to higher inflation rates worldwide, making it more challenging for governments to balance their budgets. Reeves' comments come as many countries are grappling with similar economic challenges. In the United States, President Joe Biden's administration is facing pressure to raise taxes to fund its infrastructure plans. In Europe, the European Central Bank has raised interest rates to combat inflation. The UK government's ability to meet its borrowing targets will be closely watched by investors and economists. A failure to do so could lead to a loss of confidence in the pound and higher borrowing costs for businesses and individuals. Reeves' speech marked a significant moment in the run-up to the Budget, with many expecting her to outline further measures to reduce public expenditure. The Chancellor's comments have set the stage for a potentially contentious debate on tax rises and spending cuts. By Becky Morton, Political Reporter Note: This article follows AP Style guidelines and maintains journalistic objectivity. It provides necessary background context, quotes, and attributions while maintaining an informative and globally-minded tone. *Reporting by Bbc.*