The U.K.’s finance minister John Healey delivered his first fiscal budget on Wednesday, announcing funding for defense, AI initiatives and measures designed to ease cost-of-living pressures.
The Autumn Budget included dozens of measures aimed largely at easing rising costs for Britain’s population, but Healey was careful not to risk the ire of markets, which responded broadly positively to his plans
As a net energy importer, the U.K. is vulnerable to external energy shocks. Inflation has risen sharply this year, with surging fuel costs driving the annual inflation rate to 3.5% in September. Markets expect the Bank of England to hike interest rates next month, while government borrowing costs have risen sharply this year.
The U.K. government, led by Prime Minister Andy Burnham, had promised to alleviate economic pressures ahead of the budget. On Wednesday, Healey said he would deliver “breathing space” for families, saying the country needs “radical change on energy,” and citing the inflationary impact of the U.S.-Iran war — a conflict he said “we did not want.” His measures included the removal of standing charges on household gas heating bills, the extension of a tax break on electricity for millions of households through July 2027, and £100 ($133) checks for those living in the four lowest local housing tax bands. This will cost £2.6 billion.