Reeves to Drop Tax-Rise Plans Because of Better UK Forecasts

Chancellor of the Exchequer Rachel Reeves has been able to drop plans to raise income taxes because she received an improved fiscal forecast from the UK’s budget watchdog, people familiar with the matter said.

The latest update from the Office for Budget Responsibility moved in a significantly more favorable direction due to the strength of government receipts and stronger wage performance, the people said, asking not to be named discussing sensitive matters. A fiscal hole predicted to be as wide as £35 billion ($46 billion) is in fact now closer to £20 billion, they said.

Rachel Reeves

Photographer: Andy Rain/EPA/Bloomberg

Reeves is still expected ...