It formed the centrepiece of a cost of living package, which he said would \u201ctake the pressure off in the coldest months, and see people through to the spring\u201d.<\/p>\n
The \u00a32.6bn cost of the \u00a3100 giveaway includes funding for the Scottish and Welsh governments, which Healey said he hoped they would use to implement a similar scheme.<\/p>\n
\u201cI know that with the conflict in the Middle East, rising energy bills are a real worry. I know that people look to government at times like this, not to solve all their problems, but to give them a bit of breathing space,\u201d he said.<\/p>\n
But the government\u2019s independent forecaster warned households face a \u201cgrim picture\u201d on living standards, as it slashed the outlook for the economy in 2027 and said there was \u201cvirtually no growth\u201d in disposable income for households.<\/p>\n
Healey also came under fire for an unexpected 2p increase in tax rates for income earned on property or savings. As well as hitting savers and landlords, the Office for Budget Responsibility<\/a> (OBR) said it risks \u201cleading to a steady rise in rents\u201d, by deterring landlords from the market and cutting supply, as well as passing on costs to tenants.<\/p>\n Ruth Curtice, the chief executive of the Resolution Foundation thinktank, criticised the \u00a3100 handout, arguing it would have been better to give more generous support to the poorest consumers.<\/p>\n \u201cThe chancellor has missed the mark with badly targeted support that has left families facing a tough winter as energy bills rise,\u201d she said.<\/p>\n As expected, the chancellor also cancelled fuel tax rises planned by Rachel Reeves, and extended the VAT cut on electricity prices previously announced to next summer.<\/p>\n Healey announced several measures intended to cut businesses\u2019 costs \u2013 including raising the rates relief threshold from \u00a312,000 to \u00a318,000 for companies in the retail, hospitality and leisure sectors. The change would be funded by higher taxes on gambling and vape shops, he said.<\/p>\n The cost of the household support measures will be met by a doubling of the additional levy banks pay on their profits, to 6%; as well as the higher taxes on income from property and savings.<\/p>\n .<\/a><\/p>\n The additional bank tax will only last for 15 months and marked a less significant rise than some in the industry had feared. Banks\u2019 share prices were among the highest risers in the blue chip FTSE 100 index on Wednesday.<\/p>\n Laura Suter, director of personal finance at AJ Bell, said: \u201cSavers will be hit with another hefty tax rise on their savings interest, adding to the squeeze on their savings over the past few years.\u201d<\/p>\n She added that the higher tax on rental income \u201ccould be passed on to tenants, with rent hikes a potential lever for landlords to mitigate any increase in tax\u201d.<\/p>\n \u201cEqually, we could see yet more landlords selling up, in favour of investing their money in other assets that have lower taxes and less government tinkering,\u201d she said.<\/p>\n The New Economics<\/a> Foundation thinktank accused Healey of failing to be bold enough. Hannah Peaker, its deputy chief executive, said: \u201cAs households prepare to be hit by a wave of price rises this winter, the chancellor has shown the right instincts but not yet the right scale.<\/p>\n \u201cThe \u00a3100 support with energy bills will provide some welcome relief, but the chancellor could have been braver in the face of what we are up against.\u201d<\/p>\n skip past newsletter promotion<\/a>Free newsletter |Every weekday<\/p>\n Sign up to Business Today<\/p>\n Get set for the working day \u2013 we’ll point you to all the business news and analysis you need every morning<\/p>\n after newsletter promotion<\/p>\n Energy provider EDF predicts that the Ofgem price cap \u2013 which determines consumer bills \u2013 is set to go up by \u00a3466 in January<\/a>. And despite Healey\u2019s promise of a \u201cbreathing space,\u201d in the teeth of the crisis, official forecasts published by the OBR alongside the budget pointed to a challenging winter.<\/p>\n Presenting the forecasts, the OBR\u2019s David Miles highlighted a \u201cpretty grim picture\u201d for household finances, as inflation rises to almost 4%.<\/p>\n .<\/a><\/p>\n Even by 2030-31, it only expects real disposable household incomes \u2013 its favoured measure of living standards \u2013 to be 2% higher than before the Covid pandemic. It now expects anaemic economic growth of 1% next year, about half a percentage point lower than expected in March.<\/p>\n Healey said higher inflation and interest rates had hit the government\u2019s finances too, ratcheting up the government\u2019s interest bill by \u00a314bn this year alone, but promised to stick to Labour\u2019s fiscal rules.<\/p>\n The OBR said Healey would meet the most important rule \u2013 to balance day-to-day spending with tax revenues \u2013 with a diminished headroom of \u00a315bn by the target date of 2029-30, against the \u00a324bn Rachel Reeves had built up in the spring.<\/p>\n Borrowing is scheduled to be higher than expected in the short term, but the chancellor promised to rebuild the buffer against the rules to \u00a322bn by the end of the five-year forecast period.<\/p>\n \u201cThat is what a buffer is for. Use it when you need it, rebuild it when you can,\u201d he said. Bond markets appeared unruffled by the higher-than-expected borrowing.<\/p>\n The deferral of some important decisions to next year\u2019s spending review prompted the Conservative leader, Kemi Badenoch, to argue Burnham was keeping his options open on an early general election.<\/p>\n Burnham doubled down on his promise not to call one, however, telling reporters on Wednesday that he could rule one out for at least 12 months. \u201cI\u2019m not thinking about my own party and its prospects. I am thinking about people, and I\u2019m thinking about what I can do to help them.\u201d<\/p>\n Badenoch said Britain had \u201coverspent, overborrowed and overtaxed\u201d, and criticised Healey for delayed decisions on defence spending and welfare cuts. Healey has said he will tackle welfare after reports from Alan Milburn on youth unemployment and Sir Stephen Timms on disability benefits, expected next month.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/10\/1793249652_131_500.jpg\")
<\/p>\n