UK budget: Healey accepts smaller fiscal buffer after global shocks hit economy
EWU•John Healey said the budget uses some of the fiscal headroom established last year to absorb global shocks, leaving £15 billion of headroom in 2029/30. The OBR raised its growth forecast for this year to 1.2%, while the budget includes a £100 energy payment for 20 million households.
1. Fiscal buffer and growth
Healey said the government would use some of last year's fiscal headroom to absorb the impact of the Iran war and protect the economy and family budgets. The OBR puts headroom against the stability rule at £15 billion in 2029/30, rising to £22 billion in 2030/31. It forecasts growth of 1.2% this year, followed by 1% next year.
2. Household and business measures
The budget includes a £100 Household Energy Payment for 20 million households in council tax bands A-D this winter, as part of a £2.6 billion scheme. Healey also announced an extra 3% on the Bank Surcharge, a 3.9% increase to the National Minimum Wage and National Living Wage, and £4.7 billion of government-backed lending for a first-time buyer equity loan scheme.
