The Office for Budget Responsibility (OBR) unexpectedly published on its website the economic and fiscal outlook for November 2025 before the official budget announcement by Finance Minister Rachel Reeves, causing market confusion. The key assumptions presented in the report:
OBR assumptions: now vs earlier
-
The British OBR forecasts government borrowing of £138.3 billion in 2025–26 and £117.7 billion in 2026–27.
-
The medium-term productivity growth forecast was lowered to 1.0% from 1.3% earlier, which is a structurally negative signal for the economy’s long-term growth potential.
-
The freeze on income tax thresholds will be extended from 2028–29 to 2030–31. According to the OBR, this is expected to generate about £8 billion in additional revenue in 2029–30, one year more than previously assumed, gradually pushing more taxpayers into higher brackets as wages rise.
-
Revenue gains from tax increases and fiscal changes are projected to reach £26.1 billion annually in 2029–30, compared with a lower tax-burden path in the March outlook.
-
The forecast for average real GDP growth was cut to about 1.5% per year, which is 0.3 percentage points less than the OBR’s March projection.
-
The public sector current budget surplus for 2029–30 was raised to £21.7 billion from £9.9 billion forecast in March. This may look “positive”, but is achieved mainly through higher taxes and threshold freezes.
-
A mileage tax for electric cars will be introduced from 2028: 3 pence per mile for BEVs and 1.5 pence for PHEVs, indexed to CPI, expected to become a significant new revenue source.
-
A restriction on “salary sacrifice” benefits: pension contributions above £2,000 per year will be subject to NIC from April 2029, effectively increasing the tax burden on higher contributions.
-
A new tax on expensive properties: an additional council tax charge for homes valued above £2 million starting in 2028, projected to generate about £0.4 billion per year.
The British pound fell and UK gilt yields rose after markets reacted to the budget information and the expected increase in government borrowing. GBPUSD pair surges today.
Source: xStation5
BREAKING: EURUSD ticks down on lower-than-expected claims 📉
Silver gains 1.5% 📈 Technical triangle chart pattern forming?
DE40: DAX drops to important support zone 📉Defense stocks stabilize after the decline
Aussie and Kiwi dominate FX trading 📈 Central bank policy in the spotlight 🔍
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
