Stairway to headroom
Think tank: Resolution Foundation
Author(s): Various authors
November 27, 2025
This report from UK think tank the Resolution Foundation puts the Autumn Budget 2025 decisions on tax, spending and borrowing into context.
The Chancellor’s second tax-rising budget arrived under dark clouds, but forecasts came in better than feared. But even though she was saved from the worst predictions of past weeks, the Chancellor still faced a tough task to clear three big hurdles – fixing the public finances, easing the cost of living squeeze on families, and taxing smartly and fairly. This briefing note argues that she did clear these hurdles, albeit not flawlessly.
She scraped over the first, raising enough revenue to keep credibly to the fiscal rules, but delaying the biggest tax rises to the backend of the Parliament.
She eased over the second, with a cost of living package that softens the immediate squeeze on households and gives extra support to the most vulnerable.
But the third hurdle wobbled the most: the tax system still has some big distortions and the Chancellor cannot say that workers were not hit. In the end, however, she ensured those that have got off lightly in previous fiscal events have footed more of the bill.
