Few surprises as chancellor uses low-key speech blaming ‘global economic storms’ for stoking energy prices and cost of living crisis

• Budget 2026: key points at a glance

• Briefing: key questions answered by Heather Stewart and Pippa Crerar

• Editorial: Budget’s bold ambitions and welcome first steps

John Healey raised taxes on banks and landlords to fund a £100 winter handout for 20 million families as official forecasts made clear there is no end in sight for the cost of living crisis.

In his first budget, the chancellor blamed “global economic storms” for the grim outlook, as the war in Iran drives up oil and gas prices.

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© Photograph: House of Commons/AFP/Getty Images

© Photograph: House of Commons/AFP/Getty Images

© Photograph: House of Commons/AFP/Getty Images

Payments to 20m homes part of package to cut energy bills and ease cost of living crisis, paid for by bank windfall tax

• ‘A pretty grim picture’: outlook for UK living standards slashed despite Healey’s budget

• Budget 2026: key points at a glance

John Healey promised to steer Britain through “global economic storms” as he announced an energy giveaway of £100 to 80% of households in England, funded by a smaller than expected windfall tax on banks.

In his first budget, the chancellor said 20 million households in council tax bands A to D would receive a £100 payment – a measure he said would cost £2.6bn.

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© Photograph: House of Commons

© Photograph: House of Commons

© Photograph: House of Commons

OBR cautions about Middle East war dragging down growth and triggering a fresh cost of living crisis

• Healey offers £100 payment to households to help navigate ‘global economic storms’

• Budget 2026: key points at a glance

• Budget 2026 live – latest updates

British households face a “pretty grim picture” for living standards as the war in the Middle East drags down growth and triggers a fresh cost of living crisis, the government’s independent forecaster has said.

In a report as John Healey announced his first budget, the Office for Budget Responsibility (OBR) issued a sharp downgrade for growth in 2027, household disposable incomes and the public finances despite the measures taken by the chancellor.

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© Photograph: Vuk Valcic/SOPA Images/Shutterstock

© Photograph: Vuk Valcic/SOPA Images/Shutterstock

© Photograph: Vuk Valcic/SOPA Images/Shutterstock

Payments to 20m homes part of package to cut energy bills and ease cost of living crisis, paid for by bank windfall tax

• ‘A pretty grim picture’: outlook for UK living standards slashed despite Healey’s budget

• Budget 2026: key points at a glance

• Budget 2026 live – latest updates

John Healey promised to steer Britain through “global economic storms” as he announced an energy giveaway of £100 to 80% of households in England, funded by a smaller than expected windfall tax on banks.

In his first budget, the chancellor said 20 million households in council tax bands A to D would receive a £100 payment – a measure he said would cost £2.6bn.

Continue reading...

© Photograph: House of Commons/UK Parliament/PA

© Photograph: House of Commons/UK Parliament/PA

© Photograph: House of Commons/UK Parliament/PA

John Healey is announcing his financial update – here are the main points, with political analysis

• Budget 2026 live – latest updates

John Healey starts by saying that his budget is “delivered at a time when global uncertainties and pressures are swirling worldwide and hitting people here at home”.

Healey says he will meet the fiscal rule that day to day spending must be covered by tax receipts and the investment rule that government debt, defined as public sector net financial liabilities, must be falling as a percentage of GDP in the third year of the forecast.

The government will have £15bn of headroom in 2029-30 and £20bn in 2030-31, according to the Office for Budget Responsibility, the government’s forecaster.

Government borrowing will be 4.2% of GDP this year, 3.4% next year, then 2.9% and 2.1% 1.8% by 2030-31, the OBR says.

Predictions of slowing growth were wrong, Healey says. The OBR says GDP will grow by 1.2% this year, 1% next year, 1.6% in 2028, 1.8% in 2029, 1.7% in 2030, 1.6% in 2031. In March the OBR had predicted GDP growth of 1.1% in 2026, rising to 1.6% in 2027 and 2028, and dropping to 1.5% in 2029 and 2030.

Government debt is forecast to be 83.2% of GDP this year, 83.8% next year, and then falling to 83.1%, 82.3% and 81.7% in the following years.

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© Composite: PA;EPA;Getty

© Composite: PA;EPA;Getty

© Composite: PA;EPA;Getty

All the major tax and spending policies as John Healey announces them

Chancellor’s predecessor Rachel Reeves had planned to reduce allowance from £20,000 to £12,000 a year from April

• Business live – latest updates

• What to expect from the budget: who wins, who pays?

John Healey is to use his first budget to ditch plans to slash the annual cash Isa allowance, the Guardian understands, preferring a carrot rather than a stick to encourage people to invest more in shares.

City experts welcomed news that the chancellor will overturn a decision by his predecessor, Rachel Reeves, to cut the allowance from £20,000 to £12,000 a year from April to get more money flowing into UK company stocks.

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© Photograph: Tetiana Chernykova/Alamy

© Photograph: Tetiana Chernykova/Alamy

© Photograph: Tetiana Chernykova/Alamy

The new government, led by Andy Burnham, will deliver its first budget on Wednesday, a plan expected to tread between wide ambition and narrow financial limits.

© Pool photo by Carlos Jasso

OBR says that living standards are forecast to rise by just 1% over the whole post-Covid decade

• Budget 2026: key points at a glance

Martin Lewis said that, when he met John Healey this morning, the chancellor said that, having removed standing charges from gas bills, he would also like to get rid of them from electricity bills. Lewis said:

The chancellor said he will be talking to Ofgem about how they get rid of the charge on electricity as well, but that is ‘trickier’ apparently and will take longer.

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© Photograph: House of Commons/UK Parliament/PA

© Photograph: House of Commons/UK Parliament/PA

© Photograph: House of Commons/UK Parliament/PA

OBR says that living standards are forecast to rise by just 1% over the whole post-Covid decade

• Budget 2026: key points at a glance

Martin Lewis said that, when he met John Healey this morning, the chancellor said that, having removed standing charges from gas bills, he would also like to get rid of them from electricity bills. Lewis said:

The chancellor said he will be talking to Ofgem about how they get rid of the charge on electricity as well, but that is ‘trickier’ apparently and will take longer.

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© Photograph: House of Commons/UK Parliament/PA

© Photograph: House of Commons/UK Parliament/PA

© Photograph: House of Commons/UK Parliament/PA