John Healey will deliver his first Budget as chancellor at approximately 12:30pm. Credit: Kirsty O'Connor / Treasury
Chancellor John Healey has promised to give Britons “breathing space” on the cost of living in his first Budget while adhering to the fiscal rules, despite global uncertainty.
In a video message ahead of his speech at approximately 12:30pm today (28 October), the chancellor said the Budget will make the UK more resilient to global shocks, with the conflict in the Middle East having pushed up energy prices and the cost of living.
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Healey touted the UK economy's resilience: investment rising, productivity growing, and the joint fastest growth in the G7 in the first half of the year.
"This Budget is designed to give households breathing space from some of the everyday costs, provide targeted support for businesses and self-employed people, and to start the long-term action needed to get energy costs down for good," he said.
Standing charges will be scrapped from household gas bills next year or "as soon as possible", with around 60% of households set to see a £45 per year reduction in their bill, according to the Treasury.
Plans to cut the annual Cash ISA allowance from £20,000 to £12,000, announced at last year's Budget, will also be scrapped, the FT reported.
In his pre-Budget address, Healey repeated a familiar call to appease the gilt market: "We will do all of this responsibly, sticking within tight fiscal rules, and make sure every pound is well invested."
The bond market has not yet reacted strongly, with 10-Year gilt yields up 2bps to 5.37% and their 30-Year counterparts are down 1bps to 5.77%, according to data from MarketWatch at the time of reporting. Meanwhile, the FTSE 100 is down 0.3% in early trading.
The chancellor also said the government will back British businesses and entrepreneurs, invest in growth technologies, build more homes and shift power out of Whitehall.
The devil will be in the detail: Investment Week reported on Tuesday (27 October) that tax relief for savings and investments are becoming less generous, while the FT reported that the government has quietly dropped its target to build 1.5 million homes by the end of this parliament.
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"In an uncertain world, we will strengthen national security and our defences, as well as our support for Ukraine," he continued.
But he has repeatedly failed to commit to spending 3% of GDP on defence by 2030 ahead of the Budget, despite resigning as defence secretary from Keir Starmer's administration over a spending row.
Sue Noffke, manager of the Schroder Income Growth fund, said on Tuesday: "For UK equities, this needs to be a Budget that does no harm. After two years in which businesses have absorbed significant increases in costs and taxation, another broad increase in the corporate burden would risk undermining the investment and growth the government wants to encourage."
Many analysts are expecting a low-key affair, while media briefing has been notably more subdued than in the previous two outings under former chancellor Rachel Reeves.
"Ultimately, UK companies need greater policy stability and confidence to invest. A relatively uneventful Budget that delivers that would not be a bad outcome," added Noffke added.
Ola Adeosun, head of regional wealth planning and family governance at LGT Wealth, said: "Recent Budgets arrived with so many spoilers you could almost skip the speech. This year the plot has been kept much more under wraps, and we have had far fewer anxious calls as a result.
"But calm is not the same as comfortable. Families are still digesting changes that have already landed, and those, rather than anything rumoured to be in the announcement itself, are what's dominating conversations around both the boardroom table and the family dinner table."
