UK finance minister Healey to present restrained budget under bond-market pressure
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Finance minister John Healey will unveil a cautious budget designed to relieve strain in the bond market and advance regional devolution, while keeping borrowing tightly constrained.
British finance minister John Healey is set to deliver a restrained budget on Wednesday, aiming to give the new administration of Prime Minister Andy Burnham some breathing space from the mounting costs imposed by the bond market. The statement said the budget is intended to help the country get through a “difficult moment” and point toward a fairer future path.
The budget, scheduled for just after 12:30 p.m. GMT, will set out plans to give regional mayors greater control over tax revenues as part of Burnham’s devolution agenda. It also earmarks more than £20 billion for state-run finance institutions to help stimulate investment in artificial intelligence, defence and green energy by the early 2030s.
Healey faces limited room to maneuver after a surge in global borrowing costs and the lasting memory of the 2022 mini-budget that triggered a bond-market sell-off. Britain recently paid the highest interest on a five-year government bond since 2008, and bond dealers expect less than £10 billion of additional debt issuance this year.
To ease the tax burden on employers introduced by his predecessor, Healey has pledged to cut paperwork for businesses, targeting savings of about £800 million annually. Larger reforms, including measures to address inflation-driven public-spending pressures, are expected to be pushed back until a ten-year plan later this year and a spending review in 2027.
The Treasury also announced low-cost measures such as tariff reductions on certain imports and the removal of standing charges on gas bills, linking costs to actual consumption. Sarah Coles, head of personal finance at AJ Bell, said targeted tax changes could benefit carers and parents, but added that for many households the impact would be modest.