JOHN HEALEY SETS OUT BUDGET PLANS ON 28 OCTOBER

John Healey is due to deliver his first Budget as Chancellor on Wednesday, 28 October, at about 12.30pm. He will address MPs in the House of Commons immediately after Prime Minister’s Questions. The speech will set out the government’s tax, spending and borrowing plans for the year ahead. Healey has declined to rule out tax increases and has said government borrowing costs are at “historic highs”. He promised “fiscal discipline” at Labour’s conference earlier this year.

The Debt Management Office will update the government’s financing plans for this financial year alongside the Budget. Working within the Treasury’s remit, the office arranges gilt auctions and determines the mix and maturities of government bonds sold. A poll of gilt dealers suggests bonds maturing in more than 15 years will account for about 7 per cent of issuance, down from more than 30 per cent five years ago. The same dealers expect the net contribution from Treasury bills to rise from £5bn to £10bn this year. Pension fund demand for long-dated bonds has diminished, making them harder to sell.

Shorter-term borrowing requires the government to refinance debt sooner, at interest rates that will apply when it matures. Ten-year US Treasury yields recorded their biggest monthly rise in September since September 2022. Healey also faces pressure to increase defence spending. After the Budget, the government will introduce a Finance Bill to implement tax measures announced in the speech. MPs may be asked to approve some changes to existing taxes on Budget day, while other changes may take effect later.