Budget 2026: key points at a glance
Summary
UK Chancellor John Healey’s budget sets out measures to reduce household energy costs and says the government will meet its fiscal rules. The Office for Budget Responsibility forecasts modest economic growth and falling government borrowing over the coming years, while the budget cites global pressures, including the war in Iran, as contributing to higher costs.Key Facts
- The government’s fiscal rules require day-to-day spending to be covered by tax receipts and public sector net financial liabilities to fall as a share of GDP in the third year of the forecast.
- The Office for Budget Responsibility forecasts £15 billion of fiscal headroom in 2029-30 and £20 billion in 2030-31.
- The OBR forecasts GDP growth of 1.2% this year and 1% next year, rising to 1.8% in 2029.
- The OBR forecasts government borrowing to fall from 4.2% of GDP this year to 1.8% in 2030-31.
- The government plans to extend a VAT cut on energy bills through July, which Healey said would reduce the annual price cap by £50.
- The government plans to abolish gas standing charges for 23 million homes; it estimates two-thirds of households will save an average of £45 a year.
- Households in council tax bands A to D will receive a £100 energy payment, at a stated cost of £2.6 billion.
- Healey said fuel duty would be frozen for the 16th consecutive year.
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