Overview
- The Chancellor is considering cutting the 5% VAT on gas and electricity and moving green and policy levies off electricity bills, with typical household savings reported at up to about £200 a year.
- The Autumn Budget is scheduled for November 26, with measures expected to target regulated costs such as energy, rail fares and air passenger duty.
- Officials have urged the Office for Budget Responsibility to factor in lower inflation and interest-rate expectations, which Bloomberg Economics estimates could provide roughly £6 billion of fiscal space if accepted.
- Andrew Bailey has said lower regulated prices could trim about 0.5 percentage points from services inflation, potentially giving the Bank of England scope to cut rates sooner and easing government debt-servicing costs.
- Rachel Reeves faces a roughly £35 billion fiscal gap driven by weaker growth, higher debt interest and welfare reversals, while the Treasury declined to pre-announce policy changes and said the Budget will focus on cutting waiting lists, national debt and the cost of living.