Stories

Wed, 21 Oct 2026

Wed, 21 Oct 2026 Faisal Islam: Inflation and borrowing figures illustrate chancellor's Budget challenge

The economic figures released on Wednesday show the constraints for John Healey as he puts the finishing touches to his Budget.

* The National Debt has topped £3 trillion for the first time in official figures.
* Inflation has hit 3.5% and is expected to rise further, potentially reaching 4.2% next year.
* Borrowing costs are increasing due to rising inflation and interest rates.
* The Bank of England may raise interest rates next month due to services inflation and core inflation.
* Benefits such as personal independence payment (PIP) and carer's allowance will increase by the September consumer price index (CPI) measure of inflation, resulting in a 3.9% increase in the State Pension.
* Food price inflation remains relatively unaffected by energy shocks.
* UK borrowing costs have risen alongside other advanced economies due to global market tensions.
* The chancellor is expected to announce measures to address cost of living pressures while balancing the need for economic growth and reducing borrowing.