Energy Crisis Shapes UK Budget as Chancellor Faces Pressure Over Defence Spendin

John Healey's maiden Budget is likely to omit clear plans to boost defence spending, reform taxes and curb the welfare bill, economists have predicted, in a move that would kick "tough decisions into the long grass". Healey, who resigned from Sir Keir Starmer's government over the Treasury's refusal to set out how it would lift spending on the military to three per cent of GDP by 2030, is expected to delay several major financial decisions until a Spending Review in 2027.

7 per cent would amount to approximately 11bn more in expenditure each year. City economists have predicted that the Chancellor will deliver a string of small policy measures to support households and businesses with cost pressures, and maintain a fiscal buffer large enough to avoid spooking the markets.