Chancellor targets cost of living crisis in budget for a ‘difficult moment’

Healey hopes to give ‘hope for the future’ but only modest policies are expected with important decisions deferred

John Healey has acknowledged the UK faces a “difficult moment” but insisted he would put the country on a better path as he delivers his first budget on Wednesday against a turbulent global economic backdrop.

But despite the international uncertainty, the chancellor will signal “fresh hope for the future” as he attempts to sound a more optimistic note, by providing households with breathing space from rising cost of living pressures.

The budget, which will be interpreted as a signal of Andy Burnham’s intent, is nevertheless expected to be a relatively modest affair as Healey grapples with stark fiscal realities, putting off important decisions on tax and spending until next year.

“The world’s a highly uncertain place,” the chancellor said, in a video released before the budget. “Conflicts abroad are pushing up energy prices, and the cost of living here at home – piling pressure on the families, on businesses and on our public finances.”

Healey insisted the government would move to ease the cost of living “responsibly” by sticking to Labour’s self-imposed fiscal rules, as he attempts to reassure the markets that his plans for longer-term reform will make Britain “more resilient” from global shocks.

The chancellor has limited scope for big giveaways because of the stretched public finances, made worse by international market turmoil caused by the Iran conflict, but changes aimed at easing the cost of living are set to feature heavily.