UK budget bets on energy relief as watchdog flags weak living standards

· Economy · United Kingdom

Chancellor John Healey used his first budget to offer £100 energy payments to 20 million households and raise taxes on banks and landlords, blaming 'global economic storms' and higher energy prices for stoking the cost of living crisis. The Office for Budget Responsibility said higher energy prices will affect everything from prices and living standards to economic growth, and forecast living standards to rise by just 1% over the whole post-Covid decade. Healey told departments to make 1% cuts to fund defence and brought forward the defence spending target.

Why it matters：The watchdog's weak living-standards forecast suggests energy shocks will keep squeezing households even as the government spends to cushion them.

Key points

  • The OBR forecasts living standards to rise just 1% over the post-Covid decade.
  • Healey blamed higher energy prices for the cost of living crisis.
  • Departments were told to find 1% cuts for defence.

Sources (original reporting)

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