This report is from this week’s CNBC’s UK Exchange newsletter. Like what you see? You can subscribe here.
Follow CNBC’s coverage of the Budget throughout the day on our live blog here.
The dispatch
Despite the millions of words written and spoken about today’s Budget, the event will probably be all but forgotten a decade hence.
Give or take one or two, most Budgets are quickly forgotten by most people apart, maybe, from some politics nerds and the splendid folk at the Institute for Fiscal Studies who are paid to assess these things.
Rachel Reeves, the chancellor of the Exchequer (U.K. finance minister), has done her best to challenge that convention. Her first Budget, delivered on Halloween 2024, is still debated a year on because of the £25 billion ($33 billion) she extracted from businesses via an increase in employers’ national insurance contributions (a payroll tax) and the resulting rise in unemployment.
Britain’s Chancellor of the Exchequer Rachel Reeves poses for a photograph among rails of jeans during a visit to a Primark store on Tottenham Court Road in London, U.K., on November 24, 2025.
Carl Court | Afp | Getty Images
In the main, though, few Budgets remain in the consciousness even weeks later.
An exception was delivered on March 10, 1981 by Geoffrey Howe while Britain was in the grip of stagflation.
Inflation, which had taken off in the mid-1970s, was running at 15% while unemployment had risen by one million over the previous year.
The national debt was also surging. Howe’s response was a Budget that raised the then-enormous sum of £4 billion in taxes via a freeze in thresholds — a tactic Reeves is set to deploy today — and big increases in alcohol, tobacco and motor fuel duties.
There was a windfall tax on the banks, whose profits had been swollen by the government’s recent increases in interest rates aimed at curbing inflation (the Bank of England did not gain monetary independence until 1997), as well as a tax on the oil then starting to flow from the North Sea.
Coming from a government committed to cutting taxes, it was highly controversial, with several MPs from Howe’s own Conservative Party walking out during the speech.
At the end of March 1981, 364 economists — among them Mervyn King, a future Bank of England governor — famously wrote to The Times arguing there was “no basis in economic theory or supporting evidence” for his policies, warning that the Budget threatened Britain’s “social and political stability.”
While painful, Howe’s third Budget is now remembered as one that tamed inflation and enabled interest rates to be reduced, bringing down a high exchange rate that had been hammering British industry. Most economic historians now agree it set Britain on a path for growth for the rest of the 1980s.
Ghosts of Budgets past
Also well remembered from that era, with Prime Minister Margaret Thatcher in 10 Downing Street, was the 1988 Budget presented by Howe’s successor Nigel Lawson. It still divides the pundits.
Lawson had already shown himself to be a reforming chancellor with his Budget in 1984, in which he abolished an investment income surcharge and simplified the business taxation regime by scrapping a number of tax reliefs, while at the same time cutting corporation tax rates.
On March 15, 1988, he sought to go further, cutting the top rate of income tax from 60p to 40p and reducing the basic rate from 27p to 25p. However, he also announced a coming change in mortgage tax relief, sparking a surge in mortgage applications as people sought to buy homes before it came into effect later that year.
As Thatcher later recalled in her memoirs: “This gave an immediate boost to the housing market … at just the wrong time, when the housing market was already overheating.”
Coming at a time of looser monetary policy, this fiscal easing can be seen as sowing the seeds for the recession of the early 1990s and accompanying housing market crash.
Another Budget remembered by many — sadly for the wrong reasons — is Gordon Brown’s on July 2, 1997. The first Budget delivered by a Labour chancellor for 18 years included a £5.2 billion windfall tax on the privatized utilities in order to fund Brown’s proposed “Welfare to Work” scheme, a cut in corporation tax and a reduction in VAT on domestic fuel.
But the measure for which it is most recalled was a decision to strip pension funds of the tax credit received on dividend payments.
In his Budget speech, Brown justified the measure thus: “The present system of tax credits encourages companies to pay out dividends rather than reinvest their profits. This cannot be the best way of encouraging investment for the long term.”
The subsequent history of business investment in the U.K. suggests Brown failed in this aim. Worse, the move — reckoned to have cost pension funds a cumulative £250 billion over the following 20 years — hastened the closure of defined benefit pension schemes in the private sector as employers concluded they could not afford to keep them open.
They have been replaced by less generous defined benefit schemes where the risk of a retiree’s income falling short is borne by the employee rather than the employer.
It has condemned millions of private sector workers born after around 1960 to a poorer retirement than they would otherwise have enjoyed and, once defined benefit schemes were closed to new members, effectively meant they were in run-off — obliging them to hold bonds instead of equities in order to match their liabilities. Institutional investors and pension funds owned around half of the U.K. stock market prior to Brown’s move; that is now down to around 4%.
One other memory persists from 1997. Budget Day is the one day in the parliamentary calendar when an MP — the chancellor — may drink something other than water. Labour’s Denis Healey delivered his 1970s Budgets while sipping brandy, Howe preferred a gin and tonic while Ken Clarke, Conservative chancellor from 1993 to 1997, enjoyed whisky at the despatch box. Brown switched to water in 1997 and every chancellor since has followed suit.
Given how long chancellors take in trying to package their Budgets, it is remarkable how few stick in the memory, with 1981, 1988 and 1997 among the exceptions.
The danger for Reeves is that both her Budgets — few in Westminster expect her to be around for a third — will do. And not with good cause.
Top TV picks on CNBC
Sanjay Raja, chief U.K. economist at Deutsche Bank, discusses the forthcoming Autumn Budget
Laura Cooper, global investment strategist at Nuveen, says the U.K. faces “more acute growth pressures” that the Budget has to factor in.
Former Conservative U.K. Treasury Minister and Goldman Sachs Chief Economist Jim O’Neill says the Budget is being driven by a desire to keep Labour Party MPs on side.
— Holly Ellyatt
Need to know
The UK Autumn Budget 2025. Britain prepares for a “smorgasbord” of tax hikes to be unveiled Wednesday. Follow CNBC’s coverage of the Budget throughout the day on our live blog here.
Markets are on tenterhooks over the UK’s budget plans. Market strategists say that Reeves must stick to her own rules and that a selection of tax rises are a necessity in order to placate investors. But they warn the chancellor must go further than that.
[PRO] Three ways for investors to trade the Budget. Investors say the pessimism looming over Reeves’ crucial Autumn Budget this week masks a range of contrarian opportunities across different sectors and asset classes.
— Holly Ellyatt
Quote of the week
What I’d like to see coming from the budget is measures to address the cost of living challenges that are faced by members of the public, and I want to see investment in our public services. We’ve had years and years of austerity, which have undermined growth in our economy, and we need to really fuel growth.
— John Swinney, First Minister of Scotland
In the markets
London-listed stocks moved higher this week, with the FTSE 100 adding 0.6% since last Wednesday as investors await the U.K.’s Autumn Budget. The U.K. index hit its highest point during the week on Tuesday, the day before U.K. Finance Minister Rachel Reeves attempts to satisfy voters and money markets in her public address.
It’s been a busy week for defense stocks amid a possible peace deal between Kyiv and Moscow. European names slid over the week, but individual U.K. names Rolls-Royce, BAE Systems and QinetiQ were mixed.
The British pound wobbled over the past few days but was last seen up 0.18% against the U.S. dollar week on week. It hit its lowest point on Wednesday last week.
Yields on the U.K. government’s 10-year bonds, known as gilts, were lower over the same period, moving from 4.546% to 4.483%.
The performance of the Financial Times Stock Exchange 100 Index over the past year.
— Tasmin Lockwood
Coming up
Nov. 26: The 2025 Autumn Budget is unveiled
Nov. 28: U.K. car production for October
Dec. 1: Bank of England mortgage data for October
— Holly Ellyatt