UK's first budget plan: Use fiscal buffers to cope with global shocks, aim for a turnaround within three years

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智通财经2026/10/28 13:36

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The UK Chancellor of the Exchequer, Healey, on Wednesday announced the latest tax and spending measures in his first budget, stating that this is a budget designed for UK workers and businesses, built on fiscal discipline, combining immediate action with long-term direction.
Healey said that the country currently faces a global economic storm, with trade tensions dragging on global growth, and the Middle East conflict being a key factor affecting forecasts. The government is cooperating with allies to end the conflict and restore shipping in the Strait of Hormuz.
He chose to use the fiscal buffer set up last year to absorb the impact of the Iran conflict to protect the economy and household budgets. The Office for Budget Responsibility confirmed that the stability rule buffer for the 2029/30 financial year is £1.5 billion, rising to £2.2 billion in 2030/31.
Borrowing is expected to fall to 4.2% this year, 3.4% next year, 2.9% in 2028/29, 2.1% in 2029/30, and 1.8% in both 2030/31 and 2031/32. The aim is to eliminate the recurring budget deficit within three years.
The debt-to-GDP ratio is 83.2% this year, 83.8% next year and in 2028/29, then dropping to 83.1% in 2029/30, 82.3% in 2030/31, and 81.7% in 2031/32.
The Office for Budget Responsibility has raised this year’s growth forecast to 1.2%, next year to 1%, 1.6% in 2028, 1.8% in 2029, 1.7% in 2030, and 1.6% in 2031.
The bank surcharge will be increased by an additional 3 percentage points as a temporary measure to fund immediate energy bill support. This will be implemented from January and last for 15 months.
The defence investment plan will be fully funded, including reprioritising departmental capital spending, and the creation of an innovative defence financing working group. The National Wealth Fund and British Business Bank will deploy up to £5 billion in investments and loans over the next four years.
Both the National Minimum Wage and National Living Wage will rise by 3.9%, benefiting 2.3 million low-income workers.
For energy bills, a new cost control framework will be introduced, the upcoming gas transporting obligation will be scrapped, and households in 20 regions in bands A to D will receive a £100 household energy subsidy, totalling £2.6 billion.
In terms of savings and investments, the annual tax-free cash ISA allowance will be retained at £20,000 and a "Starter ISA" will be launched. Public financial institutions will provide an additional £2.04 billion in support for 140,000 jobs.
For start-up support, the trading exemption will be raised from £1,000 to £3,000, a grant for young entrepreneurs will be introduced, British Business Bank’s commitment to female-led businesses will be doubled to £200 million, and the EMI2 programme will be launched.

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UK's first budget plan: Use fiscal buffers to cope with global shocks, aim for a turnaround within three years

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