Autumn Budget 2026 predictions and speculation

A former economic advisor to PM Andy Burnham, Lord Jim O'Neill, has told the FT that big tax rises will undermine both confidence in the UK economy and a return to healthy growth.

He also claims it would be "wise" for the Chancellor to undergo an “emergency” cut (£10bn) to the fiscal buffer in place as the fallout of the Iran war continues, with the markets likely to be understanding of the measure.

After discussions with the big banks on Tuesday, the Chancellor has called in supermarket heads and leading leisure operators for a meeting next week, according to Sky reports. The invitation has sparked fears of business rates rises for big retailers to fund help for smaller high street operators in the Budget.

The meeting will discuss "the UK's retail, hospitality and leisure sectors, small businesses and the high street", a source told the broadcaster.

The Iran war has halved the fiscal headroom available to the Chancellor at the Autumn Budget, the FT estimates. The conflict and soaring energy prices driving inflation have "blown a near-£12bn hole in Britain’s public finances", the paper says. It's cut the buffer from the £23.6bn forecast by the Office for Budget Responsibility in March to about £12bn. 

Investors tell the FT that the headroom could reduce to £14bn at the Budget without sparking a gilt sell-off.

The Chancellor is planning a "major intervention" to help with energy bills, The Guardian reports. The paper says he is considering paying more than £1 billion to help energy customers, mostly targeting those on benefits. He is, however, to refuse requests from Energy Secretary Miatta Fahnbulleh to spend billions more to eliminate levies from bills altogether, it adds.

The Prime Minister will delay publishing a review of the welfare system until after the Autumn Budget, due to concerns about the costs of an overhaul, according to The Times.

The paper says that the review by former Labour Health Secretary Alan Milburn will now not be published until November at the earliest. 

The big banks are still in the dark on potential tax hikes following their meeting with John Healey, The Times reports. 

City Minister Lucy Rigby led the meeting, which lasted an hour, but the Chancellor told those attending that he had yet to take decisions on taxes.

“Nobody came out any the wiser,” one of the people told the paper.

The banks have argued strongly against any further tax rises, but another senior executive told the FT that they were fighting an uphill battle. 

“We’re obviously speaking against it, but it’s just tough to argue against it. It’s tough to argue against it when we are all making so much money,” said one senior executive. “It’s just politically such an easy place to go take it from.”

A majority of the public would like to see inheritance tax scrapped, according to a new YouGov poll, Investment Week reports.

Following speculation that IHT could be reformed in the Autumn Budget, the survey found most supported scrapping the tax entirely. Over a third (34%) strongly supported doing so, and another one in five (20%) tended to support it. Even more (67%) supported raising the £325,000 threshold.

Only 13% supported increasing the current 40% rate.

The big banks will be lobbying the Chancellor to cut their capital requirements when they meet with him tomorrow, according to the Chair of the Treasury select committee.

Dame Meg Hillier told the FT she expected the banks to complain to the Chancellor abotu the impact of regulation on loans, as well as fears of increased taxes on the sector.

“[Lenders] say to me repeatedly, ‘we can do a bit more and still be safe’, and they give me the numbers, so they’ll be doing that to the Chancellor no doubt,” she said.

The Chancellor is to "delay difficult choices" and introduce some help for households and businesses rather than large tax rises in the Autumn Budget, the FT reports.

"A mantra of 'do no harm' in the Budget is doing the rounds in Labour circles," the paper reports, and quotes Labour insiders. “It is likely to be a steady-as-she-goes Budget, meaning the job of fully funding the next spending round will be for 2027,” one said.

John Healey has invited the heads of the big high street banks to a meeting next week, ahead of the Budget later this month, Sky News reports. The chief executives of Barclays, HSBC, Lloyds, NatWest, Santander and Nationwide have been asked to attend amid fears in the financial sector that the Chancellor is planning further taxes on the sector. 

It follows warnings from JPMorgan Chase head Jamie Dimon and others against further pressure on banks and financial services, which already contribute about a quarter of all corporation tax receipts. Earlier this week, Revolut, Britain's most valuable fintech and other challenger banks also joined the chorus calling on the Chancellor to rule out a tax raid on the sector.

The Budget will offer no help for those with student loans, The i Paper reports. "Senior government sources" have told the paper that reforming student loan repayments would "cost an absolute fortune", and that there is "no money".

In July, Lucy Powell, the new Education Secretary, described the current interest charge as “egregious” and said the government was considering changes to the repayment threshold and the interest rate on Plan 2 loans, which are the focus of complaints and were taken by undergraduates beginning courses in England between 2012 and 2023.

Business confidence slumped in September, driven down by fears of tax rises in the Autumn Budget, according to the Institute of Directors' Economic Confidence Index. The Telegraph reports that its survey found two-thirds (65%) were pessimistic about the UK economy and seven in ten (70%) were planning to freeze or cut investment in the coming year. 

"The biggest factors having a negative impact on their growth are tax levels, policy uncertainty and weak demand," said Anna Leach, Chief Executive of the IoD. 

"The absence of confirmation that business costs will go down or at least be stable in the Budget" during the Labour Party conference was noticed, she added.

The Prime Minister has denied that he would have to raise taxes to fund his plans for a National Care Service. When challenged that his plans to end the triple lock on the state pension would not be enough to pay for the service, he argued there was "a different way of doing it".

"If you delay the date of introduction and you introduce a National Care Service progressively", it would not necessarily mean tax rises, he told Sky News.

The IFS on Tuesday warned that ending the triple lock would not "be the answer" to funding universal social care. 

"Because the unreformed triple lock was so unpredictable, it is hard to know how much this reform will save the Exchequer; savings are likely to be relatively small in the first few years, but rise substantially over time. We should not expect this reform to save enough that it could fund universal social care in the next parliament," it said. 

The economy expanded slightly faster in the second quarter than previously estimated, according to the ONS, providing John Healey with a modest pre-Budget boost. The body has revised its GDP growth figure for the three months to June from 0.4% to 0.5%. Combined with 0.6% growth in the first quarter, it confirms the UK's position as the fastest-growing G7 economy.

A resilient services sector is behind the growth, the ONS director of economic statistics told the FT. 

Andy Burnham has committed to keeping the triple lock on the state pension until 2030 in his first Labour Party conference speech since becoming Prime Minister. From April 2030, the state pension "will hold its value relative to earnings over time", rather than the highest of wage growth, inflation or 2.5%.

He also confirmed his commitment to ensure low-income pensioners will not be dragged into paying income tax during this parliament.

The chancellor has announced a local apprenticeship service, led by mayors, to deliver “thousands more apprenticeships” across the country, The Guardian reports.

He also hinted that the government was prepared to make another attempt at welfare reform to cut spending, without giving details, however. 

"Our social security system must always be there for those who can never work. But for everyone else, benefits should be a bridge to work, to wider participation, to a better life, not a trap that people can’t escape,” he told Labour's party conference. 

Andy Burnham will pave the way to ending the triple lock on the state pension at Labour's party conference, according to The Telegraph's political editor. 

The paper reports that the Prime Minister will "signal his willingness to review the policy", but not commit to scrapping the policy, which the 2024 Labour manifesto promised to retain. Under the triple lock, in place since 2010, the state pension rises by the highest of inflation, wage growth or 2.5% each year. 

The Prime Minister is to revive Help to Buy, the housing scheme to help first-time buyers, the FT reports. The new Your First Home scheme will offer a 20% equity loan with an interest-free period to first-time buyers who can raise just a 2.5% deposit on a new-build property. 

House builders have welcomed the announcement.

UK borrowing overshot forecasts by £3.5 billion in August, the FT reports. Borrowing rose to £18.3bn, pushed up by inflation increasing government spending on public services and debt interest. In the fiscal year to August, borrowing was £77.3bn, £8.1bn above the OBR’s March forecast.

The rise in borrowing costs could halve the Chancellor's fiscal headroom at the Budget, economists have told the paper. 

The Prime Minister and Chancellor are considering increasing capital gains tax to fund a rise in the personal allowance (currently frozen at £12,570), according to The Telegraph.

The proposal to raise the allowance by £3,000 comes from Labour donor Dale Vince, backed by modelling he commissioned from the National Institute of Economic and Social Research. Sent to both the Treasury and No 10’s policy unit, it would see CGT equalised with income tax (phased over several years) and scrap the CGT exemption and revaluation of assets on death. 

The number of homes having to pay the high-value council tax surcharge – the "mansion tax" introduced at the last Budget – could more than double under plans being considered by the Chancellor. According to The Times, the Autumn Budget may reduce the property value threshold for paying the levy (of between £2,500 and £7,500 a year) from £2 million to £1.5m.

The change, a "live discussion" in the Treasury, would mean nearly 300,000 properties would pay the levy, up from an estimated 134,000 expected under the current threshold, the paper reports. It also says that proposals to overhaul stamp duty and council tax and replace them with a property or land value tax will not go ahead, as it would take too long and require a massive revaluation exercise.   

Thousands of small businesses could be excluded entirely from business rates under proposals the Chancellor is considering, according to The Telegraph. The paper says Treasury officials have held workshops with business groups looking at reviving high streets.

One option is to increase the threshold for small business rates relief, which has been frozen for a decade at a rateable value of £12,000. Another is to increase the Treasury’s transitional relief, reducing the impact of April's business rates revaluations.

John Healey is considering a tax on holiday lets to treat them as second homes for council tax purposes, rather than businesses, The Telegraph reports. It would add thousands of pounds to the cost of running them, the paper notes.

A junior Treasury minister confirmed in a written parliamentary answer that it was reviewing “the tax treatment of short-term lets, such as self-catering accommodation” to tackle concerns that second-home owners were using small business rates to reduce their tax bills. 

Raising capital gains tax is the "front runner" among the revenue-raising options the Chancellor is considering ahead of the Autumn Budget, The i Paper reports. A Labour MP told the paper that there was "political interest" in raising the tax among MPs but this would have to be balanced with the "raw economics" and the risk of discouraging entrepreneurs. 

The Autumn Budget will be "challenging", the Prime Minister has told reporters, blaming "inflationary pressure" as a result of the Iran war. However, he rejected the portrayal of his administration as a "traditional tax-and-spend socialist government".

"[I]t's not the case that we aren't going to take difficult decisions. We will take difficult decisions to make sure the economy remains on track," he told broadcasters.

The Chancellor's fiscal headroom has shrunk to as little as £5 billion, The Times reports. According to the paper, the Office for Budget Responsibility has entered its ten-day forecast period, following a week in which government borrowing costs reached a 19-year high. 

The paper also quotes Andy Haldane, former Bank of England economist, calling on the Prime Minister to cut spending, rather than increase taxes. "The market now suspects that this is a traditional tax-and-spend socialist government with better TikTok videos," he said.

The Chancellor is looking to extend the business rates cuts announce for pubs, clubs and live music venues to others, such as cafes and hairdressers, according to The i Paper. It also suggests that lobbying against further tax rises on banks by figures such as JP Morgan chief executive Jamie Dimon may be backfiring. 

"Instead of dialling down the idea, this lobbying is reminding ministers that such a move could be highly popular politically to a nation sick of being taxed," the paper reports.

Political uncertainty and conflict in the Middle East have hit housing activity, according to house builder Berkeley, which has called for a radical overhaul of stamp duty, Reuters reports. 

It wants reforms to stamp duty, including a 1% cap for first-time buyers and downsizers, and the removal of a 5% surcharge on investors. It argues that reduced transaction levels now cost the Treasury more in lost tax receipts than raised from new-build sales.

Soaring borrowing costs could force the Chancellor to an emergency Budget, according to trading platform XTB. "If we see oil prices continue to move deeper into triple digit territory… this would transform next month’s Budget into an emergency Budget to plug fiscal holes," said its research director, according to City AM. 

“Tax rises under the Labour government are nothing new, but Healey and co. may also be forced into huge welfare cuts to bring borrowing down and pay the debt interest bill."

Over two-thirds (67%) of the public expect tax rises at the Autumn Budget, according to a new poll by Lord Ashcroft Polls. More than half also opposed tax rises: 15% said that they thought the government should raise taxes and will; another 52% said they should not but will; 15% thought the government should raise taxes but won't and 4% though they should not and will not. 

The poll also found that 52% supported keeping the pensions triple lock, with only 21% in favour of scrapping it. 

The Chancellor is seeking to announce a new first-time buyer ISA at the Autumn Budget, The i Paper reports. The new savings vehicle will have no upper age restrictions and would be a "new and improved" product replacing the existing lifetime ISA, which is restricted to those under 40, according to Treasury sources.

The Chancellor has refused to rule out tax rises in the Budget saying that he would only set out his plans in his announcement on October 28, The Telegraph reports.

Speaking after his first major speech as Chancellor, during which he said fiscal discipline would be his "first priority", John Healey refused to comment on potential changes. "[I]f I respond to speculation now, that will only fuel more speculation," he told reporters.

Before the weekend, the Chancellor told the FT he would ensure the Budget gave the UK a fiscal "buffer against uncertainty" 

The Chancellor is considering increasing taxes on slot machines by raising the machine games duty payable by premises that host them, The Times reports. It follows the Prime Minister last month committing to reducing the number of bookmakers on high streets by scrapping the Aim to Permit rule, making it easier for councils to block new betting shops. 

The British Retail Consortium wants a "Budget boost" for the sector, Retail Week reports. The group is calling on the Chancellor to raise the national insurance contribution from £5,000 to £6,000, partly reversing the cut in Rachel Reeves' first Budget. 

"Previous changes to NICs hit retail disproportionately hard and soaring employment costs are making it harder for retailers to offer the crucial entry-level roles that so many young people rely on," Helen Dickinson, the organisation's chief executive said. 

Business Secretary Jonathan Reynolds has ruled out an exit tax for companies moving abroad, according to the FT. It reports that he has privately reassured business leaders an exit tax was not among the government's plans, and a source at the Department for Business, Innovation, Science and Trade told the paper that exit levies were "unequivocally ruled out".

“Keeping companies in the UK is key, and it must be done by providing them with the environment and incentives they need,” the source added.

Large tax rises are now "inevitable", following the increase in long term borrowing costs, says The Sun, quoting economists. The yield on 30-year gilts rose to 5.89% yesterday, the highest since 1998.

Capital gains tax "looms out" as a prime target for tax rises in the October Budget, Lord Jim O'Neil has told LBC's Andrew Marr. With "damned manifestos" constraining rises elsewhere, CGT was in the crosshairs, the economist, life peer and former minister told Marr.

"They’ve ruled out the three main taxes, so if they’re going to have to find some money to balance the books, something like capital gains tax looms out as one of the things you’d go go for, not least because traditionally most Labour think tanks think it makes sense to equalise that to income tax,” he said. However, it was "the last thing that should be happening" if the government wanted to see more growth, he added.

O'Neil, who was an informal economic adviser to Andy Burnham before he was elected Labour leader, last month declined a role in the Prime Minister's team.

John Healey is appealing across the Treasury for ideas for the Autumn Budget. According to The Guardian, he has invited all staff, including those outside policy development such as IT workers and apprentices, to submit ideas. He's particularly interested in proposals for spreading growth around the country, boosting local industries, and cutting costs for families and businesses. The most interesting will be invited to pitch to the Chancellor face to face.

“The Chancellor wants to harness the talent in the Treasury and across the country to improve our communities and high streets and give people and businesses a bit more breathing space," a Treasury spokesperson told the paper.

Lower immigration in the Office for Budget Responsibility's economic forecast could wipe out up to £4 billion from the Chancellor's fiscal headroom at the Budget, the FT reports, citing comments from think tank the Institute for Fiscal Studies. The OBR already cut its central forecast for net migration by 60,000 at the Spring Statement. 

The Prime Minister will not tax the wealthy out of Britain, he has told the FT.

"[W]e need wealth creation and the best wealth creators not just forging their path here," he said. While he declined to commit to not raising business taxes at the Budget, he said he was committed to "meaningfully deal with the cost of living and the cost of business".

He also told the paper that he wanted to boost Britain's growth rate through closer ties to the EU. 

Andy Burnham has refused to rule out tax rises in the Autumn Budget, ITV reports. Asked by reporters, he denied the public would "necessarily need to accept" that they would pay more tax to fund his existing spending pledges. However, he accepted that the public finances were challenging and said he "won't be unrealistic". 

"I ran Greater Manchester for ten years, and we ran a very tight ship with rock-solid finances. Nothing will change as I come into this role as Prime Minister," he said.

In a separate interview with LBC, the Prime Minister reiterated that he would honour the party's manifesto commitments. These include not raising the basic, higher, or additional rates of income tax, or VAT, as well as capping corporation tax at 25%.

The Chancellor has "little scope" to raise borrowing in the Autumn Budget, following an unexpected rise in borrowing, commentators have told the BBC. Borrowing was up more than two-thirds on last year in July at £1.8bn. It continued a "run of bad news" that will restrict Healey's options in October, one economist told the broadcaster. 

Chancellor John Healey could face a Budget “black hole” of up to £11 billion, the Telegraph reports, citing analysis by bank Societe Generale. The risk comes from a potential escalation in the Iran war causing an energy price shock that would push up inflation.

“Even before any policy announcements, fiscal headroom at the Autumn Budget could be £11.5bn lower than projected in March, owing to the US-Iran conflict weighing on growth and pushing up interest rates,” Economist Sam Cartwright told the paper. Should it worsen, the deterioration could be up to £35bn, he warned, more than wiping out the £24bn headroom reported by Rachel Reeves at the Spring Statement.

The voting records of key ministers involved in drawing up the Autumn Budget “point towards tax rises and away from welfare cuts”, according to an analysis by PensionBee, a pension provider. Capital gains tax rises, in particular, have had consistent support in the past from not only Andy Burnham and John Healey, but also Emma Reynolds, Chief Secretary to the Treasury, and Torsten Bell, the Pensions Minister, who advised Rachel Reeves in the run-up to her last Budget. He and Reynolds have also voted for stamp duty increases in the past.

The mansion tax, the high value council tax surcharge announced in last Autumn's Budget, is likely to rise in future, estate agent Knight Frank has warned. The charge, from £2,500 to £7,500 for properties worth £2 million or more, is due to take effect in April 2028, but may have to be increased to pay for spending plans announced by Andy Burnham.  

"A so-called Smorgasbord of taxes on assets and wealth is likely to be Burnham’s preferred method of payment for his plans, which would mean the High Value Council Tax bands may prove to be merely introductory rates," the head of UK residential research Tom Bill told reporters.

Chairman and CEO of JPMorgan Chase, the largest US bank, has warned John Healey against taxing the financial sector in October's Budget, the FT reports. Any windfall levy on the sector could result in the UK suffering the same fate as New York. It has seen a decline in finance roles, partly because of the city's tax system, he is reported to have told the Chancellor.

Allies of the former Prime Minister are seeking to persuade new Chancellor John Healey not to raise taxes in October's Budget, The Financial Times reports. They worry that tax rises will snuff out growth, which, at 0.4% in the second quarter, was the fastest in the G7.

"Rachel Reeves did the tax-raising in her two Budgets, and they shouldn’t do any more," a source told the paper. "We have reached the limits on tax, and now it’s about driving growth and reform."

Prime Minister Andy Burnham has told the BBC that he is "going further on business rates" after the 20% cut already announced for pubs, clubs and live music venues.

"[W]e're going to look at business rates more broadly for high street businesses in the Budget, so there’s plenty more that we can do," he told Radio 5's Wake up to money programme. Saying that the costs of doing business were too high and admitting that increases to national insurance had added to pressure, he promised to do "everything that is possible" to help. However, he warned that there was “limited room for manoeuvre”.

Falling gilt yields could help Chancellor John Healey at the October Budget, according to analysts. The forecasts would restore the £10 billion to £12bn fiscal headroom lost from rising borrowing costs this year. Daniel von Ahlen, a strategist at TS Lombard, said bond investors should “double down on gilts”, Business Matters reports. 

Speculation of a new property tax is hitting the housing market, accordign to the former RICS (Royal Institution of Chartered Surveyors) residential chairman. "We are increasingly hearing on the ground too speculation about property tax changes in the Budget becoming more of a factor in decision-making," said Jeremy Leaf, a London agency owner told reporters.

The Chancellor is planning to borrow up to £9bn to finance infrastructure projects, housing development and incentives for businesses to stay in Britain in a drive to boost growth, according to The Telegraph. The borrowing will take advantage of changes to the fiscal rules introduced by Rachel Reeves to allow greater spending on national investment.

The Autumn Budget 2026 will be one that "moves money and power out of Westminster, and into every postcode around Britain", the Chancellor John Healey has said. Announcing that the Budget will be on Wednesday 28 October, Healey gave the strongest hint yet that fiscal devolution would be key focus of the Budget. He also said that the Budget would be "built on fiscal discipline" sticking to the government's fiscal rules and "give businesses and families some of the stability they need to plan for the future".

The Prime Minister has reiterated his commitment to address adult social care, and refused to rule out tax rises to pay for it, the BBC reports. A review of social care by Baroness Casey would now be published next summer instead of 2028.

The government has “no plans” for a 10% inheritance tax on all estates, a spokesperson has told The Independent. Government ministers have previously refused to rule out the change, which would scrap existing nil rate bands to impose IHT on all estates.

Workers may face a new tax to fund social care, according to the front page of The Daily Telegraph. A 1.8% levy on earnings would be put into a privately managed fund to pay for later-life care, the paper reports. The charge would be enough to fund a system costing £18 billion a year.

The government is considering options to reform council tax and stamp duty, according to The iPaper. Alternatives include either a proportional property tax with a flat 0.48% charge on the property’s current value, or a land value tax based on the value of the land the property sits on. While the government denied it was “actively considering” the change, Burnham has previously criticised council tax as highly regressive.