UK budget cuts energy bills, raises bank tax to fund defence

2026-10-29 · Economy · United Kingdom

Chancellor John Healey delivered his first budget on Wednesday, offering £100 payments to 20 million households to help with energy bills and raising taxes on banks and landlords. He told departments to make 1% spending cuts to fund the Defence Investment Plan, brought forward the defence spending target and pledged billions to Ukraine, while directing funds toward artificial intelligence. Tax thresholds were frozen for three more years. Healey blamed 'global economic storms' and higher energy prices for straining living standards; the Office for Budget Responsibility forecast living standards to rise by just 1% over the post-Covid decade. Critics said the measures were not bold enough.

Why it matters：The budget shows how a major European economy is absorbing higher energy costs and defence demands, setting the fiscal backdrop for the UK's next election.

Key points

• £100 energy payments will reach 20 million households.
• Departments must find 1% cuts to help fund defence.
• The OBR sees living standards rising just 1% over the post-Covid decade.

Sources (original reporting)

• The Guardian
• BBC
• CNA
• CNBC
• Al Jazeera

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