ISSUE NO. 62 · BUDGET SPECIAL · THURSDAY 29 OCTOBER 2026

A Budget Special: £100 off energy for 20m households, banks pay 3% more, and the defence and welfare calls wait another year

John Healey sent £100 to 20m households and left tax on wages and dividends exactly where he found it. The money came from banks, who pay a 3% surcharge for fifteen months. It is help you can bank by spring.

What he did not do is the story. Defence and welfare both wait for next year’s spending review, and the OBR left him £15bn of room in 2029-30 to make those calls with. The bond market had already set the price: Britain borrowed at the dearest five-year rate since 2008 the day before he stood up.

A Budget Special, then: everything that changed, what the lenders charged for it, who is already paying, the numbers, the diary, and one calculator.

Lead

Twenty million households get £100 off energy bills, paid for by banks, while the decisions that cost real money wait a year.

Bands A to D get the payment straight into their accounts at a cost of £2.6bn, and gas standing charges disappear for 23m homes. The wage floor rises 3.9% in April, fuel duty stays frozen for a sixteenth year, and the planned cut to the cash ISA allowance is scrapped. Banks fund much of it through a surcharge from January. The OBR cut its 2027 growth forecast to 1%, from the 1.6% it expected in March, and debt interest costs £14bn more this year. Defence and welfare get a date, not a decision. Read the full story →

The Numbers

The Budget’s own arithmetic, and the market that set its price. Growth is marked down for next year, the headroom is thin, and the FTSE 100 gave back three-quarters of a percent on Tuesday.

More News

The Debt Management Office sold £4.5bn of five-year gilts the day before the Budget, and paid 5.04% for it, the most since 2008.

That rate is locked in until 2032, whatever the Bank does next. Britain still pays the highest yields in the developed world; investors cite inflation exposure and political churn and charge a larger term premium for it. Andrew Wishart of Berenberg warned that loosening the fiscal rules would widen that premium again, which is as good an explanation as any of why the package is as cautious as it is. The interest bill is already above £115bn a year, more than England’s entire education budget. Read the full story →

Britain’s largest employers have cut or announced at least 137,000 jobs since July 2024, the backdrop to a wage floor rising again in April.

The tally draws on more than 250 reports of layoffs, redundancies and administrations. Shops, pubs and restaurants account for roughly 45,000; Whitbread axed 3,800 roles and Sainsbury’s 3,000. Another 30% came from finance, law and professional services, where Barclays says automation could remove up to 5,000 jobs, cuts that will not reverse when costs ease. Ben Caswell of NIESR puts the rise in unit labour costs for an entry-level worker at 10% in a single year. Vacancies are under 700,000, a five-year low. Read the full story →

The Brief

Everything else from Budget day.

• Healey Breathing Space Budget Meets a £60bn Squeeze — Reeves had already taken £60bn a year from the private sector.
• Family Business Succession Tax Faces a Budget Test — HMRC still wants handover payments taxed as dividends.
• Healey Budget Ducks the Defence Spending Question — Reaching 3% of GDP on defence would cost £11bn a year.
• London Housebuilding Plan Bets on Stamp Duty Relief — Work started on 5% of the homes London needs.

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On the Diary

• Today, 9.30am GMT — Business demography, Q3. Firm births and deaths for July to September, a read on how many businesses were already going under.
• Friday, 9.30am GMT — UK National Accounts, the Blue Book. The ONS’s annual rebuild of the whole national accounts, which can move the GDP and debt figures every Budget forecast rests on.

The Toolbox

A Budget Special, so one tool for the change most likely to touch your own money. Free, no sign-up, and it shows its workings.

ISA vs SIPP Calculator

“The cash ISA allowance survives at £20,000 after the planned cut was scrapped. This weighs that allowance against a pension for the same money, tax relief and access included.”

The Close

Read it twice and the shape is the same each time. What was settled yesterday was settled for a year; what actually costs money was handed to a review that reports after the next set of forecasts. Lenders have already priced the delay, and the households getting a cheque in the spring are the same ones whose employers are still cutting. Healey has bought himself twelve months. The question is what he does with them.

Hit reply and tell me what you made of it — I read every one.

MJB