UK Chancellor Presents 2026 Budget as Growth Forecast for 2027 Falls to 1%

British Chancellor John Healey began presenting the government's 2026 Budget in the House of Commons on Wednesday, October 28, setting out revised economic forecasts and further plans to ease household energy costs. The statement began at approximately 12:34 GMT, following Prime Minister's Questions. The speech was still under way as the initial measures were reported.

Figures announced during the speech put forecast economic growth in 2027 at 1.0%, down from the 1.6% forecast at the March spring statement. The projection for 2026 was raised slightly, to 1.2% from 1.1%. Growth was projected at 1.6% in 2028, 1.8% in 2029 and 1.7% in 2030. These are forecasts, not measured economic outcomes.

Healey also said the government's fiscal headroom against its stability rule would be £15 billion in 2029-30, compared with £23.6 billion at the previous forecast. Fiscal headroom is the estimated margin between the government's projected finances and the limits imposed by its own fiscal rule; it can change as growth, interest rates and tax revenues change. The chancellor attributed some of the pressure to higher borrowing costs and international energy-market disruption.

On energy bills, Healey announced an extension of the temporary removal of value-added tax from qualifying domestic electricity bills through July 2027, beyond the previously announced March end date. He said the extension would reduce the annual energy price cap by about £50. The government also described a British Industrial Competitiveness Scheme intended to reduce electricity costs for around 10,000 industrial businesses. Detailed eligibility and implementation terms require the subsequent official Budget documents.

The announcement is the start of the annual fiscal process, not proof that every proposed tax or spending change has already become law. Parliament will debate Budget resolutions, and some measures will require further legislation. The independent Office for Budget Responsibility is expected to publish the supporting economic and fiscal forecasts. Further measures announced later in the speech are not included here.