The Chancellor entered Parliament facing a number of challenges, many of which remain outside of his control.
The ongoing conflicts around the world and persistent inflation meant that the Government is walking a fine line between fiscal responsibility and effective levers for driving economic growth.
This was evident in the Office for Budget Responsibility’s (OBR) latest growth figures:
- 2026: 1.2 per cent, (up from 1.1 per cent forecast on the Spring Statement)
- 2027: 1.0 per cent, (down from 1.6 per cent)
- 2028: 1.6 per cent, (equal to 1.6 per cent)
- 2029: 1.8 per cent, (up from 1.5 per cent)
- 2030: 1.7 per cent, (up from 1.5 per cent)
From the beginning of his speech, Healey made it clear that fiscal headroom – the amount available for spending – had fallen from £23.6 billion to £15 billion since March.
As a result, the Chancellor’s war chest was smaller, but still projected to grow.
Seemingly, big announcements on defence spending and further investment in other areas, weren’t included as expected, but will form part of the next spending review.