Budget 2026: six charts that reveal the economic realities facing the chancellor

AI desk brief

UK Chancellor John Healey’s first budget is being framed by a Middle East-driven energy and inflation shock that is pressuring households, businesses and bond markets. The Resolution Foundation says fiscal headroom may have been cut from £23.6bn to about £12bn as debt-interest costs rise; investors are said to want at least £14bn of buffer to avoid a bond market reaction.

The article highlights more than £1bn of support for energy consumers, with petrol and diesel near record highs and typical household energy bills forecast to rise to £2,000 a year from January. It also flags higher defence spending, devolution measures and weaker migration as additional fiscal variables that the OBR will need to factor into its outlook.