Britain’s Treasury chief Rachel Reeves headed to Parliament on Wednesday to unveil a high-stakes budget that is expected to raise taxes once again, as the Labour government tries to steady the economy, reassure markets and win back weary voters.

Reeves, who posed outside No. 11 Downing Street with the traditional red budget box before leaving for the House of Commons, is preparing to argue that additional tax increases are unavoidable to restore the nation’s troubled finances. In a video message released earlier in the day, she said she would make “fair and necessary choices” to ease living costs, protect essential services and keep public debt in check — while promising the most ambitious economic growth plan in a generation.

The chancellor delivered a similar message during her first budget a year ago, insisting then that it would be Labour’s only major tax-raising package this term. But sluggish economic performance has upended that pledge. Growth that appeared to rebound earlier in the year has stalled again, with critics pointing to last year’s business tax hikes as a drag.

Economists say Reeves must locate roughly £20–30 billion ($26–39 billion) in revenue. Rather than breaking Labour’s promise not to raise income tax rates, she is expected to extend income-tax threshold freezes, effectively pushing more earners into higher tax brackets as wages rise. Other changes may include adjustments to capital gains taxes, limits on tax-free pension allowances and potentially a levy on high-value properties.

The political stakes are high. Despite Labour’s sweeping 2024 election victory, Prime Minister Keir Starmer is struggling with falling poll numbers and growing unrest within his party. A poorly received budget could deepen speculation about a leadership challenge as Labour trails far-right Reform UK in several surveys.