The UK Budget in Focus: Market Response, Economic Outlook, and Remaining Policy Gaps

by Nato Balavadze

In this paper, we discuss:

• Reeves’ £26bn in tax rises that lift the UK tax burden to a record 38% of GDP.
• A calm market reaction driven by pre-leaked details, despite underlying concerns about fragmented, back-loaded fiscal tightening.
• OBR forecasts showing weak growth, lower productivity, and inflation staying firmer for longer, alongside higher borrowing and rising debt.
• The continued absence of a growth strategy, with chronic underinvestment and neglect of high-potential sectors such as digital assets, biotech, and defence-tech.

Download PDF: UK Budget December 2025