UK Wage Forecast Upturn May Boost Tax Revenue by £9bn, Easing Fiscal Buffer Pressure

English summary

The UK Office for Budget Responsibility may raise nominal wage growth forecasts, generating an additional £8-9 billion in income tax via fiscal drag. This could partially offset the narrowing of the fiscal buffer caused by rising gilt yields, easing pressure on Chancellor Reeves to announce deficit correction measures ahead of the October 28 budget.