- The Institute for Fiscal Studies (IFS) has warned that Chancellor John Healey’s “risky” Budget leaves the UK exposed to future economic shocks and fails to tackle stagnating household income growth.
- Government fiscal headroom has been cut to £15bn, leaving less buffer to absorb bad news while public service departments face real-terms budget cuts due to inflation.
- IFS director Helen Miller criticised temporary cost of living packages, including £100 energy bill payments, as inadequate substitutes for long-term economic growth under Prime Minister Andy Burnham.
- Major business groups and economic commentators expressed disappointment, with the Office for Budget Responsibility describing the current economic period as “dismal”.
- Concerns were also raised over plans to fund defence spending commitments by raiding government reserves and cutting capital budgets across other departments.
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