Chancellor Rachel Reeves has admitted the UK economy is “not working well enough” as she prepares to deliver her first autumn Budget on 26 November, with tax rises widely seen as likely.

Reeves said she would keep a “tight grip” on spending, prioritising the fight against inflation and high borrowing costs while trying to lay the groundwork for stronger long-term growth. She has asked the Office for Budget Responsibility to publish its independent forecasts alongside the statement.

The Treasury faces a public finance gap estimated at £41–51 billion, with pressure mounting on the Chancellor to raise taxes to balance the books. The announcement of the Budget date briefly eased strains in UK bond markets, though borrowing costs remain at elevated levels.

Speaking in a video message, Reeves said that while “Britain’s economy isn’t broken” too many businesses and households feel squeezed. She pointed to progress made through recent trade deals and housing reforms but said she was “not satisfied” and more action was needed to ease cost pressures and boost productivity.

For small firms, the prospect of higher taxes and tight public spending means the Budget could bring both uncertainty and opportunity. Business groups are expected to press for targeted measures to support investment, hiring and access to finance, warning that confidence remains fragile.

Reeves has signalled she will talk more in the coming weeks about productivity and reform, positioning the Budget as a chance to “fix the foundations” of the economy.