The Chancellor of the Exchequer, Rt Hon John Healey MP, will deliver his first Budget on Wednesday 28 October 2026.
The Chancellor inherits all of the economic challenges and geopolitical instability that his predecessor faced, but he has taken charge of HM Treasury alongside a wave of promises from the new Prime Minister to bring "new hope", give people and businesses "a little breathing space", devolve spending power to the regions, address the crisis in social care, materially increase defence spending … and "stick well within [Rachel Reeves'] fiscal rules" and honour the Labour government's 2024 Manifesto pledge to "not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT": still the three largest revenue-raising levers available. Can he meet all expectations, please everyone, and balance the books? Budget 2026 could be a blockbuster.
HM Treasury and Office for National Statistics data (July 2026) illustrates the scale of his task:
- Gross Domestic Product (GDP) growth (forecast average):
- 1.1% in 2026; and
- Remaining flat at 1.0% in 2027
- Consumer Prices Index (CPI) inflation (forecast average):
- 3.4% in 2026; and
- Falling to 2.3% in 2027
- Public Sector Net Borrowing (forecast total public spending in excess of total government receipts):
- £115.5bn (3.6% of GDP) in 2026/27;
- Falling to £96.5bn (2.9% of GDP) in 2027/28; and
- Down from £128.0bn (4.2% of GDP) in 2025/26.
- Debt interest payable in June 2026 alone was £11.8bn.
- Public Sector Net Debt (forecast total amount that the government owes):
- £2,989.9bn (at the end of June 2026) or 94.8% of GDP;
- Rising to 95.7% of GDP in 2027/28; and
- Up from 93.7% of GDP in 2025/26.
