UK budget: Healey sets out response to 'global economic storms'
TLT•John Healey said his first budget would use some previously established fiscal headroom to absorb the impact of the Iran war and protect households and the economy. He cited £15 billion of headroom in 2029/30, forecast growth of 1.2% this year and announced a £100 energy payment for 20 million households.
1. Fiscal outlook
Healey said the Office for Budget Responsibility forecast borrowing falling from 4.2% of GDP this year to 1.8% in 2030/31 and 2031/32. He said headroom against the stability rule would be £15 billion in 2029/30, rising to £22 billion in 2030/31, and that the budget would put Britain on track to eliminate the current budget deficit within three years.
2. Growth forecasts
Healey said the OBR had upgraded its growth forecast to 1.2% this year, followed by 1% next year, 1.6% in 2028, 1.8% in 2029, 1.7% in 2030 and 1.6% in 2031. He described trade tensions and conflicts in Ukraine and the Middle East as pressures on the global economy.
3. Household energy support
The government will provide a £100 Household Energy Payment to 20 million households in council tax bands A-D this winter, in a £2.6 billion scheme. Healey also said it would scrap the Gas Shipper Obligation, fund hydrogen projects directly and introduce measures aimed at reducing energy bills.
