• Chancellor Rachel Reeves announced tax hikes projected to raise £26 billion by 2030.
• A significant budget leak from the Office for Budget Responsibility (OBR) caused embarrassment for the Labour government.
• The budget includes a freeze on income tax thresholds, pulling millions into higher tax brackets.
• Measures to address cost of living, including ending the two-child benefit cap, were highlighted.

On Wednesday, UK Chancellor of the Exchequer Rachel Reeves unveiled a significant tax-raising budget, projected to generate £26 billion ($34.4 billion) by 2030. This announcement came amidst a controversial leak by the Office for Budget Responsibility (OBR), which prematurely disclosed the budget details hours before the speech, leading Reeves to describe the incident as "deeply disappointing" and a "serious error" according to India Times, South China Morning Post, and Al Jazeera.

The OBR's leak revealed that the most significant revenue measure involves freezing tax thresholds, which will pull an estimated 780,000 people into paying basic-rate income tax for the first time by the 2029-30 fiscal year. Critics argue this move breaks Labour's previous promise not to raise taxes for working families, a sentiment echoed by Conservative leader Kemi Badenoch, who decried the budget as a "total humiliation" for Reeves, according to BBC and Al Jazeera.

Reeves responded to the backlash, emphasizing that the budget was designed to ensure fairness in public finances while maintaining commitments to tackle the cost of living. Among the measures introduced are changes to tax rates on properties valued above £2 million, increased duties on online betting, and a cap on pension contributions under salary sacrifice schemes. These measures reflect the government's intention to burden those "with the broadest shoulders," according to South China Morning Post and BBC.

Additionally, Reeves announced her plan to scrap the controversial two-child benefit cap starting April 2026, a move expected to lift around 450,000 children out of poverty. However, the OBR's downgrade of medium-term growth expectations shadows these initiatives, as forecasts indicate a slowing economy amid growing pressures from inflation and geopolitical tensions, according to Al Jazeera and BBC.

As the Labour government attempts to navigate these tumultuous political waters, the immediate feedback from financial markets has been mixed, with London's FTSE 100 index experiencing a modest rise despite concerns about potential impacts on public confidence and further challenges to Prime Minister Keir Starmer's leadership. Analysts caution that the perceived instability exacerbated by the budget leak could heighten scrutiny and dissent within the Labour ranks, according to Al Jazeera and BBC.