Truss<\/a> sparked gilt market freefall and a run on sterling after introducing unfunded tax cuts in her 2022 mini-Budget.<\/p>\nMr Healey also warned that major departmental spending cuts are coming down the line to pay for the government\u2019s policies at next year\u2019s spending review.<\/p>\n
But he hit back against accusations his first budget was too modest, saying: \u201cI\u2019d fundamentally contest that this is not a significant Budget.\u201d<\/p>\n
But Kathleen Brooks, research director at trading and investment platform XTB argued that former Labour chancellor Rachel Reeves also added to the so-called \u201cmoron premium\u201d. <\/p>\n
She said: \u201cBritain’s ‘moron’ premium has indeed been rising since Liz Truss’s budget, but Rachel Reeves also added to it, with her large tax rises and boost to public spending. <\/p>\n
\u201cCast your mind back to 2025, and UK yields jumped due to fears Reeves would be sacked, and the market was concerned about her potential replacement. <\/p>\n
\u201cThe fact that Healey shifted the tone of the Budget yesterday towards growth and away from benefits is positive for the bond market, and we have seen a moderate recovery in UK Gilts since the budget was announced. <\/p>\n
\u201cHowever, the markets will soon look through his talk, and unless the chancellor is serious about cutting the benefits bill then bond yields will remain elevated.\u201d <\/p>\n
Tory leader Kemi Badenoch said the Budget was \u201cnot good enough, not strong enough, not bold enough\u201d, while Reform UK\u2019s Treasury spokesman Robert Jenrick described it as a \u201cnothing burger\u201d.<\/p>\n
The influential Institute for Fiscal Studies (IFS) think tank said the Budget\u2019s \u201craft of fiddly measures\u201d would do little to boost growth and warned it delayed tough decisions, and the left-leaning Resolution Foundation think tank said Mr Healey had \u201cspread the jam thin\u201d.<\/p>\n
But the chancellor insisted it included \u201csome big decisions\u201d, pointing to energy reforms including offering millions of households \u00a3100 to help with soaring energy bills, as well as defence spending.<\/p>\n
In Wednesday\u2019s speech in the Commons, he committed to spending 3 per cent of economic output on defence by 2030, and to \u201cfully funding\u201d the \u00a34.7 billion black hole in the defence investment plan (Dip) left by Sir Keir Starmer.<\/p>\n
The Dip shortfall will be funded \u201cthrough reprioritisation of capital budgets\u201d, according to the Budget document.<\/p>\n
Departments across government will be asked to reduce their capital budgets by 1 per cent each between 2027-28 and 2029-30 to raise some \u00a33 billion.<\/p>\n
The remaining \u00a31.7 billion shortfall will be made up from an \u201cunallocated contingency in the Treasury\u2019s capital reserve\u201d, the Budget said.<\/p>\n
In a round of post-Budget broadcast interviews, Mr Healey told Good Morning Britain that funding the Dip \u201cinvolved hard choices, it\u2019s reprioritising within government\u201d.<\/p>\n
And he signalled that departments would have to further slash spending to pay for choices made at the spending review next year.<\/p>\n
He told Bloomberg: \u201cMy Cabinet colleagues are demonstrating that they can also exert fiscal discipline and spending control, and we will take that into the spending review.<\/p>\n
\u201cBut the spending review will be framed by the priorities that we set in the 10-year plan for Britain, that\u2019s as it should be.<\/p>\n
\u201cHard decisions about the top priorities for Britain in the years to come, judgments that then follow about how we fund them.\u201d<\/p>\n
In the IFS initial response to the fiscal statement, director Helen Miller said: \u201cThe plan to reduce borrowing has been pushed back.<\/p>\n
\u201cThis Budget has a raft of fiddly measures but very little that will move the dial on growth.\u201d<\/p>\n
She added: \u201cWhether reductions in borrowing can actually be delivered depends heavily on public service spending plans, where growth is set to slow sharply after this year.<\/p>\n
\u201cHistory warns us to be sceptical of tight spending plans in later years of the forecast.\u201d<\/p>\n
Meanwhile, Ruth Curtice, chief executive of the Resolution Foundation, which has been influential on Labour\u2019s thinking, said: \u201cFaced with a tough backdrop amid global economic turmoil, the chancellor delivered a scattergun Budget that did little to address the sharp challenges facing Britain.<\/p>\n
\u201cCost-of-living support is being spread far too thinly and will leave even those families receiving help facing higher energy bills than they did during the last energy price shock.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Membership today.…\n","protected":false},"author":2,"featured_media":950677,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":["post-950676","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/950676","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=950676"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/950676\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/950677"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=950676"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=950676"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=950676"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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<\/p>\n![\"John](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/10\/92b0587a3d7011d561635cf32a467aeeY29udGVudHNlYXJjaGFwaSwxNzkzMzQ5NTky-2.86331875.jpg\")
John Healey said his first Budget was \u2018significant\u2019 (House of Commons\/PA Wire) (PA Wire)<\/p>\n