Healey seeks to steer UK through 'difficult moment' with low-key budget
TLT•Finance minister John Healey is set to announce a cautious budget, with tax hikes expected for sectors including banks and support likely for households facing high energy bills. His fiscal headroom is expected to fall to £15 billion from £24 billion in March.
1. Taxes and household support
Healey is expected to raise taxes on banks, gambling firms and online marketplaces to help fund support for poorer households facing high energy bills and a fuel duty freeze. He said the budget was about getting through a “difficult moment” and putting Britain on a better future path.
2. Investment and debt constraints
The budget is expected to give regional mayors more control over tax revenues and provide more than £20 billion in extra support to state finance institutions for investment in artificial intelligence, defence and green energy by the early 2030s. Rising government borrowing costs are constraining Healey’s options; Britain paid its highest interest on a five-year government bond since 2008 on Tuesday.
3. Fiscal headroom narrows
Britain’s budget forecasters are expected to say the margin for meeting the government’s more challenging fiscal target has fallen to £15 billion from £24 billion in March. Bond dealers expect less than £10 billion in extra debt issuance this financial year, but see next year’s financing needs rising by more than £25 billion.
