Budget 2026 - what did John Healey reveal
ON Wednesday 28th October 2026 the Chancellor of the Exchequer John Healey delivered his first Budget statement to the House of Commons updating MPs on the country's finances and the Government's plans for tax and public spending. Alongside his statement, the Government published an updated assessment of the UK economy from the independent Office for Budget Responsibility (OBR). That assessment indicated the outlook for the UK economy since the Spring Budget statement in March 2026.

OBR independent report
Office for Budget Responsibility’s October 2026 Economic and Fiscal Outlook (EFO) was released as the Chancellor sat down at the end of his statement in the House of Commons. It highlighted energy prices have risen sharply this year, pushing up inflation, lowering real incomes, and reducing GDP growth next year. Higher inflation and interest rates drive up the forecast for government borrowing. Budget decisions further increase borrowing in the near term and reduce it in the medium term. As a result, borrowing is forecast to fall to around 2% of GDP in the medium term, but at a slower near-term pace than previous plans. This would stabilise debt though at an elevated level. The fiscal mandate is met with a reduced margin which is small relative to risks around the forecast.

The OBR has revised up its growth forecast to 1.2% in 2026, 0.1 percentage points higher than in the March forecast. The OBR forecasts growth to slow to 1.0% in 2027 as the impacts of higher energy prices feed through to consumers and businesses and higher interest rates weigh on the economy. Growth then accelerates to 1.6% in 2028, 1.8% in 2029 before moderating to 1.7% in 2030 and 1.6% in 2031. This means that despite the conflict, the level of GDP ends up broadly unchanged at the forecast horizon compared with the March forecast.
(see Fiscal Outlook on page 24 of the Budget 2026 report document)
October 2026 Economic and fiscal outlook

Fuel duty freeze extended to July 2027
The Chancellor John Healey announced in his Autumn Budget statement today that the temporary 5 pence per litre fuel duty cut will be extended through the Winter and Spring until July 2027. With the addition of VAT that is effectively a welcome 6p per litre saving for motorists at a time when petrol and diesel prices at filling stations are running at very high levels because of the current serious problems in the Middle East and consequent disruption to ships carrying oil and gas from the Persian Gulf through the Strait of Hormuz and from Saudi Arabia through the Bab al-Mandab strait at the bottom of the Red Sea to destinations around the World.

VED exemption for cars more than 40 years old unchanged
This was welcome news for classic car enthusiasts, but remember that even if you're exempt from paying VED, you still need to tax your car at the NIL VED rate and have motor insurance unless you put it on a SORN.

Vehicle Excise Duty (VED) rates for cars, vans & mtorcycles for 2027 to 2028
As announced at Budget 2026, the Government will introduce legislation in the Finance Bill 2026-27 to uprate VED rates for cars, vans and motorcycles in line with the Retail Prices Index (RPI) for 2027 to 2028. This will take effect from 1 April 2027. This VED rise will hit owners of MGRV8s until they begin to reach the VED exemption in 2032.