Britain’s Chancellor of the Exchequer, John Healey, has unveiled his first budget, introducing measures aimed at protecting households and businesses from rising living costs amid growing global economic uncertainty.
The budget, presented to Parliament on Wednesday, October 28, 2026, includes energy bill support, an extension of the fuel duty freeze and tax increases on banks and gambling companies to help finance assistance for households and businesses.
According to a report by Reuters, the measures are designed to ease the impact of surging energy prices, geopolitical tensions and global trade disruptions on the British economy.
Under the plan, about 20 million households in England living in homes within council tax bands A to D will receive a £100 energy payment in 2027. Similar support will be funded for households in other parts of the United Kingdom.
The government will also extend the temporary reduction in value-added tax on electricity bills until July 2027, while plans to abolish standing charges on domestic gas bills are expected to provide further relief to consumers.
Healey said the government was responding to what he described as global economic storms, including the effects of the war in the Middle East, trade tensions and Russia’s ongoing invasion of Ukraine.
He explained that the government would use part of its financial reserves to cushion the economy against external shocks while maintaining its commitment to fiscal discipline.
The budget also provides for a temporary increase in the tax surcharge on bank profits from three per cent to six per cent for 15 months. The government expects the measure to raise about £1.5 billion to help fund economic support programmes. Reuters +2
Despite the relief measures, Britain faces a challenging economic outlook. Figures from the Office for Budget Responsibility show that economic growth is now projected at one per cent in 2027, down from the previous forecast of 1.6 per cent.
The economy is expected to grow by 1.2 per cent in 2026, slightly higher than the earlier projection of 1.1 per cent.
The government’s available fiscal headroom — the amount of room it has to meet its fiscal rules — has also fallen to £15 billion for the 2029/30 financial year, reflecting increased borrowing costs and the economic impact of international conflicts. Reuters +1
Additional measures include a 3.9 per cent increase in minimum wage rates for eligible workers, continued fuel duty relief and business rates intended to help small retail.
The government said the package seeks to balance immediate cost-of-living support with longer-term investment, economic growth and the need to keep public borrowing under control.
However, the budget comes amid concerns about inflation, higher debt-servicing costs and the pressure on public finances, leaving the government with limited room to expand spending without increasing financial risks.
In its official budget statement, the Treasury described the measures as providing immediate breathing space for families and businesses while laying the groundwork for future economic growth. GOV.UK +1
Sources: Reuters, UK Treasury, and The Standard.
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