UK AUTUMN BUDGET 2026: A JACOBITE JOKE
Updated: 5 days ago
OBR DOWNGRADES GROWTH WHILE WORKING CLASS WAGES ARE EXPECTED TO STAGNATE FOR A 2 YEAR MINIMUM
On Wednesday 28 October 2026 the UK Chancellor of the Exchequer 'Rt. Honourable John Healey MP' announced HMG's autumn budget. In doing so, these historical pirate isles were reminded: If you elect a captain whom cannot read the charts, your ship will sink and your booty is lost.
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UK ECONOMYAT A GLANCE
Prior to announcing the Autumn Budget 2026, the UK economy was performing as follows:
National Debt/Actual Figure: £3.005 Trillion (£3'005'000'000'000) representing 94 - 98% of GDP.
Annual State Borrowing: £97.8 Billion (YTD) running at £6 Billion above OBR forecasts.
Cost of Welfare Aristocracy: >£333.7 Billion DWP and another £217 Billion for additional health.
Cost of Gilt 5-Year Yield: 5.03% Highest cost since the 2008 financial crisis.
Cost of Gilt 10-Year Yield: 5.35% - 5.36%.
Cost of Gilt 30-Year Yield: 5.89%.
Cost of Av. 2-Year Fixed Mortgage: >5.97%.
Cost of Av. 5-Year fixed Mortgage: >6%
Corporate insolvencies: 1946 p/m. This >21% above pre-pandemic levels and is a national disaster.
Productive Work Flight: Since 2024 Bloomberg reports £120 Billion in wealth has left the UK as productive earners flee the tax.
AUTUMN BUDGET SYNOPSIS
You can view a recording of the Chancellor's address to Parliament via the Parliamentry website which can be accessed by clicking here.
The Chancellor announced the following measures in Parliament at 12:30pm:
ECONOMY: Temporary Bank Profit Surcharge to increase from 3% - 6%: The CEO of JP Morgan Jamie Dimon warned in advance that this would be met with economic retaliation.
ECONOMY: The National Minimum & Living Wage to increase by 3.9%: This should significantly increase unemployment.
ECONOMY: Business Rates Relief: The threshold at which retail, hospitality and leisure businesses pay business rates is to be raised by £12'000 to £18'000 supposedly exempting 70'000 more business.
ECONOMY: Gambling Tax Hike to be increased from 20% - 25%: This will fund the business rate relief.
ECONOMY: Online Retailer Crackdown:
ECONOMY: Fiscal Devolution: There will be a permanent transfer of resources to city-regions. Local councils and strategic authorities.
ECONOMY: Reeves £8000 cut to ISAs scrapped.
INFRASTRUCTURE: Local Income Tax: Starting from 2028 Mayoral Strategic Authorities will be replaced by direct share of local income tax.
INFRASTRUCTURE: Northern Scale-Ups: An allocation of £150 million from the British Business Bank is designated for fast-growing firms in the Northern Growth Corridor.
ENERGY: Rebate £100 gift: Certain people in council tax bands A-D will receive £100 payment directly into their bank account. This is expected to cost £2.6 billion.
ENERGY: Standing charges Scrapped: Gas Standing Charges are to be completely abolished.
ENERGY VAT CUT: The temporary VAT cut on household energy bills is extended through winter and spring until July 2027.
ENERGY: Fuel Duty Freeze: The 5p duty cut is extended until July 2027.
ENERGY: Mileage Rate Uplift: The higher mileage allowance rate for motorists using car for work will increase from 25p to 35p per mile.
DEFENCE REDUCTION: Science Fiction nonsence was stated in Parliament but in actual fact there will be a £2Billion Reduction to the current spending. These are savings in military pensions that will be transferred to the Treasury from the MOD.
TOTAL FISCAL HEADROOM: Allegedly £15 Billion remains to manouvre.
MARKET REACTIONS
The markets had already priced in the worst of the Budget but noting that the bank surcharge was less then first feared; adjusted their diagnosis accordingly:
Cost of Gilt 10-Year Yield: 5.32: A slight drop.
Cost of Gilt 30-Year Yield: 5.86 dropped 3 basis points in response to the £15 Billion headroom announced.
FTSE 100 & FTSE 250: These experienced modest gains as the bank surcharge was far lighter than initially feared.
GDP/USD: The pound plummeted before recovering some of its losses.
Fortunately for the Chancellor market reaction to the budget was muted by disruption on the continent with the rapidly rising yields on French bonds corresponding to some demand for UK Debt.
Frankly, anyone buying UK debt mistaking it for a safe heaven from French debt; might wish to consider that London holds the largest amount of French debt anywhere in the world i.e. if France defaults the UK goes down with it.
FUTURE EXPECTATIONS
OBR: (1) GROWTH DOWNGRADED (2) WAGES STAGNATE FOR 2 YEARS (3) MORE WELFARE/DEBT
The Office of Budge Responsibility (OBR) immediately downgraded the UK's growth for the year ahead:
The UK economy is forecast to grow by 1% in 2027,
The forecast marks a downgrade from the OBR’s previous estimate of 1.6%, published in March before the outbreak of the Iran war.
Growth is expected to accelerate to 1.6% in 2028, 1.8% in 2029, 1.7% in 2030 and 1.6% in 2031.
The latest projections compare with the OBR’s previous forecasts of 1.6% growth in 2028 and 1.5% in both 2029 and 2030.
Meanwhile, the growth forecast for 2026 was revised slightly higher to 1.2%, up from 1.1% previously.
The OBR was equally quick to confirm that wages for workers should stagnate for at least 2 years while their cost of living will heavily increase to meet the wants-of-welfare. This latter group is currently costing the nation >£333.7 Billion p/y up-front (healthcare costs arising from sloth & gout excluded) and are now to be treated with:
MORE Welfare: According to forecasts from the UK's budgetary watchdog cited by The Telegraph, total welfare spending is expected to rise from £333.8 billion in 2025–26 to £431.3 billion p/y by 2031–32.
Benefits Uplift: A 3.5% increase in benefit payments—supported by a £5.5 billion allocation in the Budget—will push up the benefits bill significantly following September inflation figures.
More Personal Independence Payment (PIP): Maximum annual PIP amounts are set to rise by more than £350, reaching nearly £10,500.
More Incapacity Benefits: The rising numbers of claims for incapacity and disability benefits remain the primary driver behind the spiralling long-term costs. These are projected to continue rising despite government welfare and labor market reforms. For the avoidance of doubt, there are no "crude" plans to deprive the morbidly obese or any other type of glutinous alcoholic of their gravy.
INDUSTRY REACTIONS
In general, the Autumn Budget 2026 was greeted with a depressed sigh of relief. Major challenges it seems have been kicked down stream. This is consistent with PM Andrew Burnham's promise not to hold a General Election within the next 12 months insofar as the Budget primarily looked at short-term fixes.
Across the pond; Bloomberg had this to say:
"Healey's first budget looks particularly low-key when compared with those of Rachel Reeves era. My colleague Giovanna Coi's analysis shows his measures only will bring in £6.6 billion in additional revenue by fiscal year 2030-31 and relatively modest £1.6 billion in extra spending. Rachel Reeves' debut was much, much bolder: £43 billion of revenue and £74.2 billion in spending.
(Irina Anghel Bloomberg analyst.)
"That lack of surprises is exactly what markets had been hoping for, though it’s notable that we’re not really seeing that much outperformance in gilts right now. Yes, yields are falling at the longer end of the curve, but only to the degree (a magnitude of around four to five basis points) that we’re seeing in France and Italy. Admittedly those have been the most battered bonds recently, so it’s a bit more significant for the UK, but overall it seems there’s a bit of relief, but more to do with the absence of a big negative rather than anything to get too excited about. And as we were saying earlier, with oil still above $115 per barrel and lots of macro news coming up, there’s not much room for complacency."
(Morwenna Coniam Bloomberg Markets Today Editor.)
"You might have missed Healey’s announcement that he’s “giving HMRC funding to improve compliance and stronger powers to collect overdue tax from those who can clearly afford to pay but ignore repeated contact.” But it was possibly the most important in the budget. Looking at the Treasury Red Book, HMRC measures to close the tax gap raise the most money when summed over the six years - almost £8 billion in total. Thats a lot more than the £1.5 billion from the bank surcharge increase, sincere its only in force for 15 months. The biggest cost is £100 household energy payment coming to £2.6 billion"
CHANCELLOR JOHN HEALEY 2026
The Rt Honourable John Healey MP was appointed Chancellor of the Exchequer by Prime Minister Andrew Burnham on 20/07/2026. Before entering politics, John Healey very briefly pursued an unremarkable career in journalism. He has no finance, business or legal experience whatsoever nor has he ever attempted to study business and/or economics.
We look forward to seeing Mr Healey join the House of Lords.
