Chancellor John Healey will deliver his first Budget in the House of Commons on Wednesday, facing strained public finances and international market turmoil triggered by the Iran war. With limited headroom for major giveaways, he is expected to stick to the fiscal rules set by his predecessor, Rachel Reeves.
Key measures for households and businesses
Fuel duty is set to be frozen for a 16th consecutive year at 52p per litre, offering some relief to motorists. The minimum wage is expected to rise by nearly 4%, and changes are planned for Carer's Allowance. The government also intends to scrap standing charges on gas bills.
Estimates of the Chancellor's available headroom range from £12 billion to £20 billion, constraining the scope for new spending.
Bank tax and defence funding
A possible increase in the bank profits surcharge from 3% to 8% has drawn support from the Trades Union Congress, which said the levy on the "bumper profits" of banks would raise £2.25 billion a year. City representatives have warned the move could stifle investment.
The Chancellor will also pledge to plug a £4.7 billion gap in the defence investment plan, commit over £600 million to artificial intelligence projects, and allocate more than £1 billion for social and affordable housing.
