Stories

Thu, 29 Oct 2026

Thu, 29 Oct 2026 Faisal Islam: This Budget was micro and that was deliberate

Chancellor John Healey's plans fall short of radical action to create a promised new economic model.

* Chancellor Healey's budget was small and focused on avoiding the market turmoil caused by Liz Truss's mini-budget.
* It announced £65bn of extra borrowing over the next five years, but this did not cause any market reaction.
* The core goal was to get through the energy crisis and its impact on borrowing costs.
* Welfare reform is a key area, with a potential "welfare-to-work" scheme and separate system for younger workers.
* The Office for Budget Responsibility's forecast showed a significant increase in the welfare bill by 2031.
* Other areas mentioned include: + Energy: a focus on "cheaper power" and reshaping clean energy targets to reduce costs. + Devolution: allowing local mayors to keep some extra business rate and income tax revenues, providing incentives for regional growth. + Spending review: the need to accommodate a new defence target of 3% of national income by 2030 will be challenging.
* The PM's 10-year plan is expected next month, which will outline a "theory of growth" and potentially detail some of the chancellor's spending constraints.