UK Chancellor John Healey to Present Budget with Energy Support and Fiscal Discipline

Chancellor John Healey has promised to use his first budget in a fortnight to offer relief to consumers and businesses while sticking to Labour's fiscal rules. Healey spoke to journalists in Bangkok, where the chancellor has been attending the International Monetary Fund's annual meetings. Healey said the budget should also reinforce the government's fiscal plans and Britain's economic resilience. Healey said the prime minister had recognised business costs alongside living costs.

The government has already cut VAT on electricity bills. Healey is expected to announce a further package of energy support at his 28 October tax and spending statement. The announcement would precede an expected sharp rise in the energy price cap in January. Higher energy prices and government borrowing costs are expected to put pressure on the budget.

Healey reiterated that he would stick to spending plans set out by his predecessor, Rachel Reeves, at last year's spending review. Healey said cabinet colleagues would have to find additional resources within existing departmental budgets. Healey said departments faced pressures in the second half of a spending review and colleagues were managing existing resources well. Healey said departments must reprioritise to undertake new activities.

The IMF praised the UK this week for setting out a plan to tackle the deficit. IMF Managing Director Kristalina Georgieva urged the government to maintain that approach. Healey pledged to meet the fiscal rules set out by Reeves. Healey said the IMF's backing recognised evidence of fiscal performance already, rather than only a forecast for the future.

Healey declined to say whether he would increase taxes on banks or raise capital gains tax to offset the expected budget pressures. Healey argued that speculation before previous budgets had been deeply damaging. Healey said speculation had prompted people to cash in pensions early unnecessarily. Healey said speculation had also prompted people to delay or forgo business investment unnecessarily. Healey said he would not engage in speculation.

Healey, the former defence secretary, also hinted that he was working on an additional support package for Ukraine to be announced at the budget. Healey said he was working on ways to increase military, diplomatic and economic support for Ukraine. Healey said Putin was targeting Ukraine's energy systems, leaving thousands without power as a harsh winter approached. Healey argued that Ukraine's future was the future of European security and that Putin must not prevail.

Healey and Bank of England Governor Andrew Bailey chaired a meeting of G20 policymakers on Thursday morning. US Treasury Secretary Scott Bessent was absent from the meeting. Healey will fly back to London on Thursday evening to complete preparations for the budget.