Explaining the budget process

In summary

• The government remains committed to holding one major fiscal event each year, making Autumn Budget 2026 the key date in the UK's economic calendar

• Chancellor John Healey's approach to tax, spending and borrowing will be closely scrutinised

• Businesses and individuals will be watching for indications of how the government intends to balance its economic priorities with the state of the public finances

From 2017, then Chancellor Philip Hammond moved to a single UK Budget in the autumn, creating one major fiscal event each year and a new timetable for economic policymaking:

• Tax and spending policies announced in the Autumn Budget

• Consultation on the changes over the winter and spring

• Draft legislation published in the summer for technical consultation

• A Finance Bill introduced following the Budget

Under the Labour regime, the Spring Statement remained with the latest forecast delivered on 3 March. However, 2025’s passed as largely insignificant with the then Prime Minster, Keir Starmer, facing a host of other challenges around his leadership. Instead, the Spring Statement provided an opportunity for his Chancellor, Rachel Reeves, to present updated economic forecasts and an assessment of the government's finances.

Despite this, there have been departures from the timetable over the years, particularly during the Covid pandemic, as well as Liz Truss’ and Kwasi Kwarteng’s ill-fated mini-Budget of 2022. Nevertheless, the principle of one major fiscal event each year remains at the heart of the government's approach to economic policymaking.

Following the political changes of recent months, the government has maintained the principle of a single major fiscal event each year, arguing that it provides greater certainty for businesses and households.

The publication of draft Finance Bill legislation during the summer consultation period remains an important part of the annual policy cycle, allowing businesses, advisers and representative bodies to review proposed changes before they become law.

The Office for Budget Responsibility (OBR) was established in 2010 to provide independent economic forecasts and analysis of the public finances. Its forecasts are published alongside major fiscal events and play a central role in shaping expectations ahead of each Budget.

A key purpose of the OBR's forecasts is to assess whether the government is on track to meet its fiscal rules. These are the government's self-imposed constraints on tax, spending and borrowing decisions, designed to support sustainable public finances and economic stability.

The OBR attracted significant attention ahead of Budget 2025 following the premature release of Budget-related information and changes. While this raised questions about processes and governance, its role as the UK's independent fiscal watchdog remains.

The fiscal rules remain a central feature of the UK's economic framework. These self-imposed constraints are designed to ensure government borrowing and spending remain sustainable over the medium term.

The Office for Budget Responsibility assesses whether the government is on track to meet its fiscal targets and how much "fiscal headroom" the Chancellor has available. Fiscal headroom refers to the amount by which taxes can be reduced, spending increased, or borrowing expanded before the government's targets are breached.

The amount of available fiscal headroom is often one of the most closely watched indicators ahead of a Budget.

The fiscal rules and the OBR's forecasts are likely to play a significant role in shaping Autumn Budget 2026.

The Chancellor's options will depend on several factors, including economic growth, inflation, tax receipts, borrowing levels and public spending commitments. Together, these determine the amount of fiscal headroom available and influence the decisions announced at the Budget. Already, predictions and speculation are ramping up, with more tax rises expected.

Prime Minister Andy Burnham has begun to embed his own priorities into government, and the Autumn Budget 2026 will show us how those priorities will be funded and delivered. Against a backdrop of ongoing pressure on the public finances, businesses and individuals will be watching closely for any significant tax, spending or economic announcements.