UK Chancellor Healey to unveil Autumn Budget Oct. 28 amid £22bn fiscal gap

UK Chancellor John Healey is set to deliver his first Autumn Budget on October 28, 2026, with the government facing a significant fiscal challenge. Analysts estimate a gap of around £22 billion between the new administration's spending promises and projected revenues.

Prime Minister Andy Burnham has acknowledged the need for "difficult choices" and has not ruled out tax increases to meet the government's fiscal rules. The government has already committed to several spending measures, including removing VAT from domestic electricity bills from October 1, 2026, a move expected to save households approximately £45 annually. This measure is reportedly funded by the cancellation of the £1.8 billion Digital ID program, though this has been disputed.

Further initiatives include capping single bus tickets at £2 in England (outside London) from January 1, 2027, costing an estimated £400 million, and a 20% cut to business rates for pubs, clubs, and live music venues starting April 2027, estimated to save typical pubs £1,100 annually. These measures are intended to be funded through budget reprioritization and reviewing reliefs for businesses deemed not to contribute positively to local communities.

Businesses are lobbying for targeted support, including cuts to employer National Insurance contributions for under-25s and further assistance with energy costs and business rates to encourage investment and growth. The broader economic picture shows a slight decrease in employment, a rise in unemployment, and increasing economic inactivity.