UK Conservative Party leader Kemi Badenoch is preparing to announce commitments aimed at reducing the budget deficit, contingent on her party’s victory in the upcoming general elections. This initiative is designed to restore voter confidence in the party’s economic management following years of financial instability.
Badenoch plans to declare the party’s intention to allocate half of its savings towards deficit reduction in a speech at the Conservative Party’s annual conference in Manchester on October 8, 2025. The remaining funds are expected to be directed towards tax cuts or public spending increases as part of what she refers to as the party’s new “golden rule,” according to Bloomberg.
This commitment comes as the Conservative Party seeks to improve its image after the turmoil caused by the previous Prime Minister Liz Truss’s policies, which included an unfunded tax cut package that led to a record depreciation of the pound and compelled the Bank of England to intervene in the government bond market.
Official statistics indicate that the UK’s public debt reached approximately 96.4% of GDP in August, a significant rise from 64.7% in 2010, the year the Conservatives assumed power.
While the party previously succeeded in reducing the deficit to £44 billion in the fiscal year 2018-2019, down from around £160 billion in 2009-2010, it surged past £300 billion during the Covid-19 pandemic as the government provided support to workers and businesses during repeated lockdowns.
The Office for Budget Responsibility anticipates that the deficit for the current fiscal year could reach about £118 billion, as ongoing pressures on public finances and a slowdown in economic growth persist.