Healey promises 'breathing space' budget within fiscal rules
John Healey has promised his first budget on 28 October will offer "breathing space" for consumers and businesses while keeping to Labour's existing fiscal rules.
Speaking in Bangkok during the International Monetary Fund annual meetings, he said he wanted the tax and spending statement to ease living-cost pressures while reinforcing the strength of fiscal plans, resilience and the economy. The Guardian
Healey said he would stick to the spending plans set out by his predecessor Rachel Reeves at last year's spending review. He said cabinet colleagues who want to fund fresh policies will have to find additional resources within their existing budgets and reprioritise. "We will meet those fiscal rules," he said, referring to the rules set out by Reeves.
Separate reporting ahead of the statement said the budget is set to pay for its measures without more borrowing. It said the package will be "scorecard positive" in 2029/30, the final year of the parliament. Reuters
Healey had been due to use the Bangkok visit to stress the importance of budget discipline and improving resilience. IMF managing director Kristalina Georgieva urged the British government to "stay the course" on its plan to tackle its deficit. The Fund has said it is not recommending faster UK fiscal consolidation.
The IMF has upgraded its forecast for UK growth in 2026 to 1.3% from 1.0%, while forecasting growth slowing to 1.2% in 2027. Healey described surprise UK growth as a 'sign of resilience'. BBC
He declined to say whether he would increase taxes on banks or raise capital gains tax. In a Bloomberg TV interview, he again pledged "breathing space" for families and businesses and said banks were part of the 'jewel' in the UK's economic crown. Bloomberg
Healey said he is working on ways to step up support for Ukraine to be announced at the budget. In Bangkok, he and Bank of England governor Andrew Bailey chaired a Thursday morning meeting of G20 policymakers in the absence of US Treasury Secretary Scott Bessent.
The 54th Meeting of the IMFC, the Fund's ministerial steering committee, was scheduled for 16-17 October in Bangkok.
