Overview
- Chancellor John Healey goes into his first Autumn Budget on Wednesday 28 October with an estimated fiscal headroom of roughly £12bn after higher inflation and rising gilt yields reduced the buffer left by his predecessor.
- The government has already confirmed limited measures including zero VAT on household electricity from 1 October, plans to cut business red tape worth about £800m, protections for the state pension and a 'Your First Home' 20% equity loan scheme for first‑time buyers.
- Healey has formally ruled out raising capital gains tax, but officials are actively considering increasing the bank profits surcharge with reports that a rise from 3% to 8% is the leading option to raise receipts.
- City economists and market commentators warn that higher debt interest and welfare pressures could require substantially more borrowing over the medium term — some estimates cite about £70bn — and investors are watching for signs the government will stick to its fiscal rules.
- The Chancellor has tightened Treasury secrecy to limit pre‑Budget leaks and is under political pressure after an entrepreneurship adviser resigned, raising concerns about support for innovative firms and the need to preserve market confidence.