07:58 AM EST, 11/12/2025 (MT Newswires) -- After increasing spending by 70 billion pounds a year, borrowing by 32 billion pounds and taxes by 36 billion pounds last year, the United Kingdom's finance minister at the time described it as a "one and done" budget, said Societe Generale.

Yet the fiscal rules were met by a slim margin of just 9.9 billion pounds, leaving the U.K.'s public finances vulnerable to adverse shifts in the underlying forecast, wrote the bank in a note to clients.

That risk now appears to have materialized, stated SocGen. A significant downgrade to the OBR's productivity forecast could create a 21 billion pounds shortfall in public finances in the Fall Budget on Nov. 26.

Combined with welfare U-turns, measures to reduce household energy bills and the government's effort to build a larger fiscal buffer, the bank forecasts taxes will rise by around 40 billion pounds/year by FY29.

However, the net fiscal tightening will be smaller at 30 billion pounds/year, which SocGen estimates will reduce the level of real gross domestic product by roughly 0.35 percentage point over the OBR's five-year forecast horizon.