The rumour mill is in overdrive and we are still 10 weeks away from the Budget.

It seems like every day, one media outlet or another is speculating on what may be under consideration for inclusion in Chancellor Rachel Reeves’ statement on November 26.

Despite proclaiming that last year’s Budget – the first by a Labour government in 15 years – was a “one off” and “not the sort of Budget we want to repeat”, there is if anything even greater scrutiny on this year’s event given the ongoing challenges regarding lack of growth in the economy.

Speculation continues to swirl around the Chancellor’s own position, so much so that in last week’s hastily organised extensive reshuffle, Prime Minister Keir Starmer’s spokesman was briefing in advance that there would be no change at No 11 – specifically to avoid any turmoil on the markets that Reeves’ position could be under threat.

Almost 15 months since taking power, the economic position remains grim with the black hole believed to be anywhere from £25 billion to £50 billion and an annual cost of £100 billion being spent on servicing debt.

It is against this backdrop that we are seeing so many possibilities as to what could be contained in the upcoming Budget. Normally the speculation would start two or three weeks out, but this time it is three months ahead of the big day.

So far, there have been suggestions that there could be a change to the overall limit for cash ISAs, restrictions to the 25% tax free cash that can be taken from pensions (currently capped at £268,275) and a reduction in the higher rate of tax relief on pension contributions.

There has also been plenty of talk that property taxation could be overhauled with a move away from stamp duty and council tax to a single annual levy on homes over a certain value. 

Although it will always deny it, some of the rumours will be emanating from Government circles, known as flying kites, to gauge how different suggestions land with the British public and what may or may not be palatable. 

What is a given is that to balance the books there is a need to raise income and reduce costs. One reason the cost of servicing debt is going up is because the bond markets are not satisfied that the current approach to managing the economy is a credible way to repay the UK’s enormous debt.

What is clear is that this is going to be another difficult Budget for the Chancellor who urgently needs to unlock a path towards improved economic growth.

This inevitably means that those with the so called “broadest shoulders” will be in the Government’s sights when we discover the actual content of the Budget at the end of November.

But what 36 years working in financial services has told me is that it is far better to react to the reality rather than try and second guess what may or may not be announced on Budget Day. 

The exception to this would be if a client is approaching a key event, such as retirement, and there is credible evidence that adjusting a plan would be a conversation worth having.

As a rule though, the inevitable bumps in the road are baked into the long-term, diversified financial planning that our team at Phillip Bates & Co Financial Services undertakes on behalf of our clients.

We will continue to keep a close watch on the feverish Budget speculation which is set to run right up until November 26 and provide further updates in next month’s newsletter.

In the meantime, as ever, please do get in touch if you would like to talk through anything with a member of our team.