Budget 2026: John Healey offers £100 payment to households to help navigate ‘global economic storms’

AI desk brief

UK Chancellor John Healey used his first budget to cushion households from rising energy costs, including a £100 payment for 20m council tax bands A-D, an extended VAT cut on electricity bills, and abolition of gas standing charges. The fiscal package is being framed around “global economic storms” as the government cites the Iran/ Middle East conflict, with higher oil prices expected to push the January energy cap up sharply.

The OBR has cut UK growth to 1% for next year from 1.6%, while higher inflation from the war is projected to add £14bn to government interest costs. Healey said he will fund the measures through a windfall tax on banks, alongside a surprise tax rise for landlords and savers, while keeping the deficit-reduction path intact.