Key facts
- Bank shares rose after the surcharge on bank profits was set to increase to 6%.
- Gambling company shares jumped on a five percentage point tax increase on high-stakes machines.
- £100 energy bill cut for homes in council tax bands A-D.
- VAT reduction on energy bills extended until July.
- Standing charges abolished, benefiting 60% of homes.
UK Chancellor John Healey's budget has been met with a lack of significant negative reaction from the bond market, a key concern for the government. The budget, described as a 'breathing space' plan, included measures aimed at easing household financial burdens and controlling inflation. The government acknowledged an additional £14 billion in debt, with the Chancellor also noting the influence of US foreign policy on trade.
Bank and gambling company shares saw positive movement following the budget announcements. Banks are set to face a temporary 6% tax on profits, a figure lower than initially proposed, while gambling firms will see a five percentage point increase in tax on high-stakes machines. The Treasury is expected to generate £4 billion from gambling taxes.
The budget did not introduce expected personal tax increases, instead focusing on energy cost relief. Homes in council tax bands A-D will receive a £100 reduction, and a VAT cut on energy bills has been extended until July. Abolished standing charges are expected to benefit 60% of households. The median household income has only recently recovered to levels seen six years prior.