The government ‘black hole’ which could see your taxes start to rise | The IndependentNotifications can be managed in browser preferences.Jump to contentIndependentNext articleIndependent Bulletin homepageSocial PartnerWe are 8 logo (opens in a new tab)AllNewsSportCultureLifestyleMillie CookeWednesday 06 August 2025 00:05 BSTGary Neville criticises Rachel Reeves over national insurance hikeThe National Institute of Economic and Social Research (NIESR) has warned that Chancellor Rachel Reeves faces a £41 billion shortfall in public finances.This deficit, projected by 2029-30, is attributed to Labour's policy reversals, increased borrowing, and sluggish economic growth.NIESR suggests the Chancellor must either raise taxes, cut public spending, or abandon her fiscal rules to address the 'impossible trilemma' of balancing commitments.Tax increases are considered the more probable solution, with NIESR highlighting that the poorest 10 per cent of households have already experienced a 1.3 per cent drop in living standards under Labour.The think tank also noted that the Chancellor's current £9.9 billion financial buffer is insufficient and proposed a potential rewrite of the government's fiscal rules.In fullReeves warned she must raise taxes or cut spending to plug £41bn black holeThank you for registeringPlease refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in