Budget 2026 live: Latest updates, analysis and fact checks

The Chancellor, John Healey, is considering raising the bank surcharge from 3% to 8%, a change that would raise over £2bn a year, the Guardian has reported, according to Global Banking & Finance. This remains a report. The Treasury has not confirmed any change to bank taxes ahead of the Budget on 28 October.

The surcharge is levied on bank profits on top of standard corporation tax. Earlier reports said Healey was likely to raise it but gave no rate or expected yield. An 8% rate would reverse the cut made under Jeremy Hunt in 2023.

The over £2bn a year figure is not an OBR or Treasury costing and has not been independently checked.

Banks have warned that a rise would harm their competitiveness, Global Banking & Finance reports.

Shares in HSBC, NatWest, Lloyds and Barclays are down between 3% and 5% in October so far, Reuters reported on 16 October.

The Resolution Foundation has called on the Chancellor, John Healey, to raise about £8bn in taxes at the Budget, including on pensioners, to rebuild the government's buffer against its fiscal rules.

The think tank said on 13 October that conflict in the Middle East has halved the headroom against the binding fiscal rule to £12bn. PA reports the foundation as saying headroom has fallen from £24bn to as little as £12bn because of the war.

It also urged Healey to target support at low-income families, and warned that delaying tough decisions is "not the right approach".

The headroom figures are the Resolution Foundation's own estimates and have not been independently checked. Healey delivers the Budget to the Commons on Wednesday 28 October.

The Institute for Fiscal Studies warns that the Chancellor, John Healey, risks setting out borrowing plans that will not hold up if he relies on spending cuts he has no intention of making.

The warning comes in the IFS Green Budget, published on 12 October as a preview of Mr Healey's first Budget on Wednesday 28 October. The report looks ahead to a Budget set against higher inflation and pressure on public spending.

Helen Miller, the IFS director, said that if the Chancellor "simply pencils in implicit cuts that he knows he would never be willing to deliver", his plans to cut borrowing and meet the fiscal rules "won't be realistic".

The IFS also says the government's spending plans rely on ever more ambitious assumptions about productivity.

In a separate piece, titled 'Chancellor Healey meets the bond market', the institute says recent rises in government borrowing costs reflect global factors.

The Chancellor, John Healey, says he wants the Budget on Wednesday 28 October to give households and firms "a bit of breathing space" while keeping to the government's fiscal rules.

"I want the budget to be a budget that gives a bit of breathing space but also reinforces the strength of our fiscal plans"

Speaking to reporters at the IMF meetings on Thursday 15 October, he said he had "said from day one and week one" that he would stick to the rules, and that he had Andy Burnham, the Prime Minister, "in lockstep alongside me". He added: "I will meet those fiscal rules." Reuters reports he also said he intends to "stay the path" on deficit reduction.

A Reuters poll of economists the same day put the median headroom against the rules at around £10bn to £12bn. That is down from £23.6bn at the March fiscal update. Some forecasters put it as low as £5bn because of uncertainty over how the OBR will score the factors involved. These are economists' estimates, not an official figure.

The economists polled said Mr Healey should rebuild headroom to about £15bn to £16bn to keep bond investors onside. They expect modest cost-of-living measures, offset by rises in some of the smaller taxes.

Reuters also reports that UK government borrowing costs hit their highest level since 1998 in the week before he spoke, and are higher than in any other major advanced economy.

The Chancellor, John Healey, will pay in full for the new spending in his Budget by 2029/30, the final year of the parliament, the FT reports, in a story carried by Reuters on 14 Oct.

Citing people briefed on the plans, the paper says the Budget will be "scorecard positive" in 2029/30. That means new discretionary spending is fully paid for. It says Healey will let the headroom act as a contingency fund and is expected to drop planned fuel duty increases of 3p a litre in January and 2p in March. A targeted package to help with higher winter fuel bills is also expected.

One person briefed on the Budget told the FT: "This will be the chancellor's way of demonstrating fiscal responsibility."

The Treasury has not confirmed the measures. A Treasury spokesperson said: "The Chancellor has been clear that fiscal discipline underwrites every promise this Government makes, which is why he and the Prime Minister are in lockstep on meeting the fiscal rules."

The fiscal rules require day-to-day spending to be met by tax revenues, with debt falling as a share of GDP, Reuters notes. It puts last year's deficit at 4.4% of GDP. The FT says the Iran war has added pressure on the public finances and left less headroom. The IMF has backed Britain's fiscal strategy and urged it to "stay the course" rather than speed up deficit reduction.