{"id":12004,"date":"2026-10-28T11:07:04","date_gmt":"2026-10-28T11:07:04","guid":{"rendered":"https:\/\/sotnews.agency\/?p=12004"},"modified":"2026-10-28T11:07:04","modified_gmt":"2026-10-28T11:07:04","slug":"burnhams-government-unveils-its-first-uk-budget-what-to-expect-business-and-economy-news","status":"publish","type":"post","link":"https:\/\/sotnews.agency\/?p=12004","title":{"rendered":"Burnham\u2019s government unveils its first UK budget: What to expect | Business and Economy News"},"content":{"rendered":"
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British Chancellor John Healey will set out the country\u2019s autumn budget, the government\u2019s tax and spending plans, the first under Prime Minister Andy Burnham\u2019s premiership amid high inflation and government spending levels.<\/p>\n

While the budget will be announced in parliament on Wednesday at 12.30 GMT, speculation about what it will lay out has ranged from a series of tax announcements to commitments to defence spending.<\/p>\n

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But the country continues to deal with a rising cost-of-living crisis and energy bills are expected to see their biggest rise in four years in January due to the ongoing conflict in the Middle East.<\/p>\n

As total United Kingdom borrowing broke through the 3 trillion pounds ($3.99 trillion) barrier for the first time in September, the country is already spending 100 billion pounds ($133bn) each year just on servicing that debt.<\/p>\n

Despite that challenge, the chancellor has said the budget will move \u201cmoney and power out of Westminster and into every postcode around Britain\u201d.<\/p>\n

In a speech last month, Healey said that he and Burnham were in \u201clockstep\u201d in meeting fiscal rules, \u201cto balancing the books, with a buffer to protect against uncertainty, to control borrowing to bear down on inflation, and reducing long-term pressures on our public finances\u201d.<\/p>\n

Gregory Thwaites, interim chief economist at the Resolution Foundation, an independent British think tank, told Al Jazeera he is expecting a \u201crelatively small budget given the limited room for manoeuvre the government has\u201d.<\/p>\n

\u201cA bit of action to offset high living costs. Most big decisions postponed to next year,\u201d he said.<\/p>\n

Following the two budgets from former Chancellor Rachel Reeves, which included big tax and spending increases, Healey\u2019s budget is, therefore, expected to take a more \u201csteady as she goes\u201d line, which some say is the wrong approach.<\/p>\n

Here\u2019s how he will be expected to achieve that.<\/p>\n

Defence spending<\/h2>\n

On Monday, Burnham said Healey would set out a plan to fully fund the government\u2019s defence plans and commitments, telling ITV\u2019s Good Morning Britain that his government\u2019s first challenge was financing the already announced defence investment plan.<\/p>\n

Announced in June, the plan is backed by 298 billion pounds ($396bn) of investment and will transform the armed forces as the country moves to \u201cwarfighting readiness\u201d and stepping up \u201cEuropean security\u201d, according to a government policy paper.<\/p>\n

But Burnham said it was \u201ccrucial that we have a funded plan that we can then implement, and we will set out more details on Wednesday as to how we\u2019ve done that\u201d.<\/p>\n

He added that NATO commitments of spending 3 percent of gross domestic product (GDP) on defence spending by 2030 and 3.5 percent by 2035 are included in the pathway, explaining that national security issues were \u201cat the top of the priority list\u201d.<\/p>\n

As it stands, Britain spends about 2.6 percent of its GDP on defence.<\/p>\n

The Guardian reported that on defence spending, Healey aims to close a 4.7-billion-pound ($6.2bn) funding gap in the government\u2019s plan inherited from the previous Labour Party leader, with cuts to other departmental budgets likely to fund it.<\/p>\n

Inflation<\/h2>\n

Government borrowing and inflation continue to rise, which is a potential spanner in the works for proposed spending.<\/p>\n

Last week, UK inflation and government borrowing both hit their highest levels in a year.<\/p>\n

According to the Office for National Statistics, borrowing was nearly 25 billion pounds ($33bn) last month alone, \u201ca little higher than a year earlier, as spending, including higher debt interest costs, increased more than government income, partly reflecting the impacts of inflation\u201d.<\/p>\n

ONS added that in the financial year to September 2026, borrowing remained below the same period last year, but it was higher than the Office for Budget Responsibility\u2019s forecast.<\/p>\n

According to Jasper Kenter, a professorial research fellow in ecological economics at Aberystwyth Business School, for the government to grow the economy without raising inflation levels, there needs to be an understanding of what kind of economy is created.<\/p>\n

\u201cThe strongest policies improve prosperity, resilience and sustainability at the same time,\u201d Kenter said.<\/p>\n

\u201cGrowth is less likely to be inflationary when it comes from increasing the economy\u2019s productive capacity rather than simply boosting spending. Measures that improve skills, reduce energy dependence, strengthen local economies and regenerate ecosystems are likely to deliver more lasting benefits than short-term stimulus,\u201d he added.<\/p>\n

Moreover, Helen Miller, director of the Institute for Fiscal Studies, said in a media release ahead of the budget that Healey \u201cfaces a forecast in which borrowing is still expected to fall in coming years, and the fiscal rules are still being met\u201d.<\/p>\n

\u201cDespite that, a \u2018steady-as-she-goes\u2019 budget is not an option available to the chancellor. Choosing to stay the course with the inherited tax and spending plans would mean allowing inflation to blow departments\u2019 spending plans off course,\u201d Miller said.<\/p>\n

Tax on banks, online sellers<\/h2>\n

The budget is also expected to reveal new taxes on banks and online marketplaces such as Amazon, Temu and eBay, as well as a funding boost for mayoralties and local authorities.<\/p>\n

The biggest four banks collectively made about profits of 15 billion pounds ($19.9bn) in the first six months of this year. Trade unions are calling for higher taxes on those earnings, the BBC has reported.<\/p>\n

According to the BBC, the Treasury is leaning towards changing a 2023 surcharge rate on banks, which would raise about 2 billion pounds ($2.6bn).<\/p>\n

On marketplaces such as Amazon, Healey is reportedly looking to crack down on foreign sellers who avoid paying VAT \u2013 a UK sales tax \u2013 which is expected to raise as much as 1 billion pounds ($1.3bn) and help fund business rate cuts<\/a> for high street shops, The Times reported.<\/p>\n

Paying for social care and benefits<\/h2>\n

According to The Guardian newspaper, Healey is expected to allocate about 1.42 trillion pounds ($1.8 trillion) this year for day-to-day spending and public investment, with about 100 billion pounds ($132.8bn) going on debt interest.<\/p>\n

Kenter, of Aberystwyth Business School, told Al Jazeera that he expects \u201ctargeted support rather than large-scale tax cuts or rises\u201d in the budget announcement.<\/p>\n

\u201cThe government appears keen to signal empathy with the pressures many people are facing. Addressing the harsh cliff edge in carer\u2019s allowance and expanding parental pay are good examples of this,\u201d he said.<\/p>\n

Some of the budget\u2019s contents have already been announced, including ending the carers\u2019 allowance limit and removing tariffs on a range of food items, including chocolate and beans, to make them cheaper for shoppers.<\/p>\n

Pensioners are also expected to be shielded from income tax through the introduction of a new personal allowance, while Healey is expected to add another 1 billion pounds ($1.3bn) to the 39 billion pounds ($51.8bn) planned for social and affordable housing in England over the next decade.<\/p>\n

\u201cPensioners will benefit from another substantial increase in the state pension, while low-paid workers will benefit from increases in the minimum wage. For most households, the bigger determinants of living standards will remain wages, inflation and energy costs rather than any new tax measures announced in the budget,\u201d Kenter explained.<\/p>\n

Last month, Burnham announced a new national care service to provide free personal care for elderly people. As costs of care for the elderly have soared in the UK, this was a major issue from the outset of Burnham\u2019s premiership.<\/p>\n

He said the plan would be introduced in phases and would be fully funded from public spending and savings from scrapping the state pension triple lock \u2013 an annual increase in state pension that goes up with inflation, wages or a fixed rate of 2.5 percent, whichever is highest.<\/p>\n

A report on how this will be implemented is due in summer 2027.<\/p>\n

Energy bills<\/h2>\n

Amid high gas and oil prices as a result of the US-Israeli war with Iran and the subsequent closure of the Strait of Hormuz, energy prices worldwide have increased, with Brent crude futures at $115.90 a barrel on Wednesday.<\/p>\n

In the UK, energy prices are predicted to reach nearly 2,000 pounds ($2,655) a year for households in January after energy consultancy Cornwall Insight projected in its latest forecast last month that the government\u2019s cap on energy prices is expected to increase by 16 percent.<\/p>\n

On energy bills, reports suggest the chancellor is expected to announce help for households in the budget by scrapping standing charges for energy supply, among other things.<\/p>\n<\/div>\n\n

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British Chancellor John Healey will set out the country\u2019s autumn budget, the government\u2019s tax and spending plans, the first under Prime Minister Andy Burnham\u2019s premiership amid high inflation and government spending levels. While the budget will be announced in parliament on Wednesday at 12.30 GMT, speculation about what it will lay out has ranged from…<\/p>\n","protected":false},"author":1,"featured_media":12005,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"facebook_2277560469115098_106292521332774":"","twitter_aToxNzczMzI3Njk4OTg4ODUxMjAxOw==_1773327698988851200":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","_monsterinsights_skip_tracking":false,"_templately_pack_id":"","_templately_imported_at":"","_templately_source":"","_templately_import_session_id":"","footnotes":""},"categories":[11],"tags":[],"class_list":["post-12004","post","type-post","status-publish","format-standard","has-post-thumbnail","category-international-news"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t