Chancellor John Healey will deliver his first Autumn Budget on Wednesday, October 28, setting out the government’s plans for tax, spending and borrowing in a statement that will be closely watched by households, businesses and financial markets. The Budget speech is expected in the House of Commons at around 12.30 p.m., immediately after Prime Minister’s Questions, and will be accompanied by fresh economic and fiscal forecasts from the independent Office for Budget Responsibility (OBR).
The Budget is Healey’s first since he became Chancellor on July 20, 2026, following Andy Burnham becoming Prime Minister. It is also the first major fiscal event of the new government, and it comes at a difficult moment: the economy is being squeezed by higher energy prices linked to the conflict in the Middle East, and the government has promised both to ease the cost of living and to stick to the fiscal rules it inherited.
A budget built on fiscal rules
Healey has repeatedly said the Budget will be built on fiscal discipline and will meet the fiscal rules, which include a pledge to balance day-to-day spending with tax revenues by the end of the decade. In a statement when he announced the Budget date on July 31, he said it would be “a budget that moves money and power out of Westminster, and into every postcode around Britain” and that it would “meet our fiscal rules”.
That commitment is the central tension of the Budget. Economists have warned that the government has only a small margin of error for hitting its fiscal target, and that some of the new government’s priorities, including extra defence spending and better social care, will put more strain on the public finances. Burnham has said that meeting the rules might mean “having to ask for a little more” on tax, while also pledging to stick with promises made by the previous prime minister not to raise the main rates of income tax, VAT or employee National Insurance.
The OBR’s forecasts, published alongside the Budget, will show how much room Healey actually has. The previous OBR forecast, in March, was finalised before the Middle East conflict escalated, and the new forecast is expected to reflect higher global energy prices and higher inflation since then. The forecasts will extend to the 2031-32 financial year for the first time, giving a longer view of the public finances than previous Budgets.
Cost of living at the centre
The government has framed the Budget around giving households “breathing space” from the cost of living. Before the Budget, Burnham announced five “everyday fixes” intended to ease pressure on families, including removing import tariffs on some goods, ending the Carer’s Allowance cliff edge, and extending parental pay to 150,000 additional parents. An earlier measure, a VAT cut on electricity bills, was said to take around 45 pounds off the yearly energy price cap, although it later emerged that the cut lasts only six months, raising questions about whether Healey will extend it beyond March 2027.
Pensioners are also in focus. The government has already committed that pensioners whose only income is the full new state pension will not pay tax on it, even though the pension is set to rise above the personal tax allowance for the first time. Recent earnings figures suggest the full new state pension could rise by almost 500 pounds a year from April, to around 13,036 pounds, above the 12,570 pound personal allowance. The Budget is expected to set out the detail of how pensioners in that position will be protected, a point Treasury officials have confirmed ahead of the statement.
Income tax thresholds, meanwhile, remain frozen until April 2031 under already-legislated policy. That freeze means that as pay rises with inflation, more income is pulled into tax or into higher tax bands, a process known as fiscal drag. Any move away from the freeze would be costly for the Treasury, and Burnham has been cautious, saying there is “no commitment at this point to change, but we will look at that at the Budget”.
What businesses and savers are watching
For businesses, the key questions are whether Healey changes any tax reliefs or allowances, and whether he offers any new support for investment and growth. The government has committed to maintaining the main corporation tax rate at 25 percent, but changes to reliefs or allowances could still affect companies’ overall tax bills. Businesses will also be listening for measures on energy costs, which have risen sharply, and for any signals on planning, housing and infrastructure spending.
Savers have already seen one major change confirmed outside the Budget. Regulations made in September cap Cash ISA subscriptions at 12,000 pounds a year for under-65s from April 2027, while the overall ISA allowance stays at 20,000 pounds. That change, which is already law, will not be revisited in the Budget, but savers will be watching for any further announcements on pensions, where pre-Budget speculation about the tax-free lump sum has repeatedly failed to materialise in recent years.
The politics of a first budget
For Healey, a former defence secretary, this is a first Budget in every sense: his first as Chancellor, the first of the Burnham government, and the first since the political changes of the summer. Healey’s emphasis on moving money and power out of Westminster suggests he wants this one to be remembered as a Budget for towns and regions, not just for London.
The timing is also notable. At October 28, this is the earliest Budget since 2021, when it was held on October 27, and about four weeks earlier in the year than the 2025 Budget. Holding the Budget before Halloween gives the government time to pass the resulting Finance Bill and to set the policy agenda before the end of the year, but it also means Healey has had only three months as Chancellor to prepare it.
Opposition parties will be watching closely too. With a general election cycle still to run, the Budget will be used by all sides to frame the economic debate: the government will argue that it is delivering stability and help for households, while its critics will test whether the numbers add up and whether the promises on tax and spending can both be kept.
What happens next
After the speech, the detail will matter more than the headlines. The OBR’s forecast documents, the Treasury’s Red Book, and the draft Finance Bill legislation will be published and scrutinised by economists, businesses and MPs in the days that follow. Some Budget measures take effect immediately, while most are included in a Finance Bill and take effect in the next or following financial years.
For households, the practical impact will depend on the fine print: whether energy help is extended, how pensioners are protected from tax on the state pension, and whether any changes to benefits, parental pay or allowances are announced. For businesses, the impact will depend on the detail of any changes to reliefs, allowances and investment incentives.
What is already clear is that this Budget will set the fiscal course for the rest of the parliament. Healey has promised discipline, help for households, and a shift of power out of Westminster. On Wednesday afternoon, the country will find out whether those three ambitions can be delivered together.
