Healey announced a tax rise for some savers and landlords - here's a closer lookpublished at 15:51 GMT 28 October

15:51 GMT 28 October

Simon Jack
Business editor

The chancellor has imposed an additional 2% tax on income derived from savings and property rental.

At the moment, basic rate tax payers are allowed to earn up to £1,000 tax free and thereafter pay 20% tax on savings income.

That was already due to go up to 22% from 1 April next year and will now go up to 24%.

Higher rate tax payers can earn £500 tax free and thereafter pay 40% on savings income, which will rise to 44%%. The measure is forecast to raise £590m a year by 2031.

The government is also imposing a 2% rise in any income from property rental. The measure is forecast to raise £455m a year by 2031. However, savings in Isas will remain tax free.

The chancellor was keen to stress that there would be no tax rise on income from other investments like share dividends - making it clear that the government would prefer savers to invest in what it considers more productive, growth boosting assets than property and savings deposits.

Additional taxes on landlords could, of course, be passed on to renters.

Image source, UK Pool

Nigel Farage says today's Budget "doesn't overall do very much, but it attempts to please a very large number of people".

Speaking at a Reform UK press conference, the party leader says: "Frankly everything the prime minister does, everything the chancellor did today, is aimed at lots and lots of little giveaways."

He praises former defence secretary John Healey's Budget as being competent and in a "different league" to the previous two from Rachel Reeves, but also calls it "deeply cynical" for not offering "anything of any value on defence whatsoever".

Reform MP Robert Jenrick also says the Budget was a "nothingburger", adding that next year is looking like a "truly terrible year" for the country.

Speaking before Farage, the MP lists the pledges a Reform government would carry out, including giving £1,300 to every family in the country and raising the tax free allowance to £15,000.

Describing it as a "flotilla of small measures", political editor Chris Mason goes through the standout points of this year's Budget below:

Healey will need to argue that his relative caution is the right approachpublished at 15:38 GMT 28 October

15:38 GMT 28 October

Harry Farley
Political correspondent

This was a Budget of many measures.

There were 98 policy changes. That is more than average and more than in Rachel Reeves’s two Budgets. But the collective weight is still relatively small in terms of the total amount spent and raised in taxes.

John Healey was clear about the politics; taxing banks, landlords and gambling companies to pay for cost-of-living support, help for the high streets, and to make sure the state pension isn’t taxed.

With so many measures, there is plenty of detail to get into which we’ll continue to bring you.

The Conservatives point to the lack of detail on how he’d hit 3% of GDP on defence, and the rising cost of government debt, as evidence that Labour’s economic plan isn’t working. They want sharp cuts in public spending.

But as Unite union leader Sharon Graham reflected in her statement, some in the wider Labour movement are also underwhelmed although their diagnosis is different. Graham said taking £100 off energy payments for some households "will not touch the sides" of the rise in prices coming.

"This government needs to face the scale of the problem, and right now it isn’t even close," she said.

Healey will need to make an argument to his own party, as well as the public, that the global constraints of the Iran war, coupled with wanting to show restraint on public spending, means his relative caution is the right approach.

Image source, OBR

In the news conference, the OBR is asked that if there was a significant crisis and recession, to what extent could the government move to soften the blow or are the public finances on too unsustainable footing?

Tom Josephs, fiscal economist, says the main driver of the high levels of debt is because of the impact of major shocks in the last two decades - the financial crisis and Covid-19 in particular.

These drove up debt because of the impact on the economy and the cost of the policy responses introduced by the government, he explains.

He says "a consequence of high debt" is that it "may make it more difficult for governments in the future to be able to respond to similar crises if they happen".

Between these crises, he says, we have seen government only being able to reduce debt "by a relatively small amount" meaning it has ratcheted up each time.

The news conference has now ended - we'll continue to bring you analysis and reaction.

Dearbail Jordan
Senior business and economics reporter

We can bring you more now from the latest Office for Budget Responsibility report.

It expects the Bank of England to raise interest rates to 4.5% by the middle of next year. Earlier in 2026, it had forecast borrowing costs would reach 4% by 2030/31.

The Bank of England will announce its latest decision on interest rates next week on 5 November.

There is a chance the Bank could raise interest rates from 3.75% to 4%.

Dearbail Jordan
Senior business and economics reporter

As the OBR delivers a news conference on its latest forecasts, we're also trawling through 200 pages of its analysis and the forecaster has calculated that public sector net borrowing will be higher than it previously thought in March.

It now reckons borrowing will be 4.2% of the UK economy in 2026-27. It had expected it to equal 3.6% of gross domestic product. In fact, public sector net borrowing has been revised upwards for every year from now until 2031-22.

Dearbail Jordan
Senior business and economics reporter

Paying interest on government debt really does take a big chunk out of the government's coffers.

The OBR's Haskel says the Treasury is paying out £14bn on borrowing costs even before it spends on anything else.

That's why there is so much talk from the likes of Healey and Burnham about sticking to the fiscal rules.

If they can reduce how much interest the government pays, that money can be spent elsewhere.

Image source, OBR

Asked about disposable income, OBR economist David Miles says it's a "pretty grim picture".

"If you go back to just before Covid... where we are right now, some seven years later, is virtually no growth per person real household disposable income," he says.

That is "pretty unusual" in the history of the UK, he says, adding that it is to "quite a substantial extent" a reflection of increases to energy prices - which he describes as a "loss to the UK".

Over a 10-year period, starting just before Covid and up to 2029, he says there is "some growth" forecast in real household disposable income "from here on forward" - but "not in the very near term" due to energy prices.

Over that entire 10 years period, Miles says there may be a 1% increase in household disposable income, or "negligible growth every year for 10 years".

"It has been a dismal period in British economic history," he adds.

Haskel moves on to talk about the government's fiscal rules.

He says Healey's Budget will meet the government's two fiscal rules to a) cover day-to-day spending with tax revenue by the end of the parliament and b) net debt to be falling as a share of GDP over the same period.

But he says there is "lots of uncertainty" around these forecasts, with risks to the outlook including changes to energy prices, departmental spending and productivity growth.

Summarising the OBR's forecasts, Haskel says the fiscal background is "challenging" for various reasons, with the economic forecast for next year showing GDP lower and inflation higher.

However inflation is expected to fall and growth to recover in the medium-term, he adds, while fiscal rules will be met at the moment.

Image source, OBR

OBR chair Jonathan Haskel says government debt interest payments have gone up as a result of the increase in bank rates, explaining that debt interest is pushing up government spending by £14bn per year.

Other "stresses" on the economy, he says, include non-debt interest spending, including welfare payments.

The net effect of the chancellor's policies over the next five years is increased borrowing over the "first couple of years" and and a decrease "in the last couple" - "so they sort of somewhat net out," he adds.

Dearbail Jordan
Senior business and economics reporter

The Office for Budget Responsibility (OBR) chair Jonathan Haskel has begun his presentation on the forecaster's latest Economic and Fiscal Outlook - and it is sobering.

Back in 2006, UK debt as a percentage of GDP was 40%.

Now, it is nearly 100%.

Since March, when the OBR last published its forecasts, oil and gas prices have jumped substantially. He also points out that disposable income per household are not expected to rise as much as it previously thought.

The Office for Budget Responsibility is about to deliver a news conference following the Budget and the release of its latest analysis.

We'll bring you key lines from their forecast right here.

As a reminder, the OBR is the UK’s official public finances watchdog. It releases forecasts for the economy and public finances twice a year, alongside the Autumn Budget and Spring Statement.

Image source, House of Commons

Much of Liberal Democrat leader Ed Davey's criticism of the Budget stems from relations with the European Union (EU).

"The biggest single thing the government could do to fix our economy is to fix our trading relationship with Europe", Davey tells MPs in the Commons.

He says that until the government has "the courage" to do so, any Budget will just be "tinkering around the edges" as, in his view, it won't provide the growth needed by those in the UK.

Davey does, however, welcome PM Andy Burnham's open dialogue on relations with Europe, but he notes the issue is "just too urgent to wait until the next Parliament".

Growth, Davey adds, is well below what it used to be when the UK was part of the European Union.

The Lib Dem leader also points to income tax thresholds, saying they should rise to avoid a "stealth tax".

Chancellor's welfare predictions are highly uncertainpublished at 14:23 GMT 28 October

14:23 GMT 28 October

Dharshini David
Deputy economics editor

The chancellor said the changes to the triple lock formula for calculating pension rises will mean the welfare budget will save £15bn per year by 2040 - compared to the existing scheme.

But those predictions are highly uncertain - the figures could vary sharply for that estimate, depending on the path of the economy. The existing triple lock has cost several times as much as estimated.

Theo Leggett
International business correspondent

Image source, get

Earlier this afternoon, the chancellor confirmed that a 5p/litre discount on fuel duty - first introduced by the Conservative chancellor Rishi Sunak in 2022 - will continue until at least July.

The plan had been to phase out the discount early next year, with an increase of 3p per litre on 1 January and a further 2p on 1 March.

But the war in the Middle East has pushed fuel prices up dramatically.

The cost of filling a typical family car with diesel has gone up by around £30 since late February. A tankful of petrol costs about £23 more.

A 5p/litre increase would have added a further £2.75 to a fill-up. But that will no longer happen until the summer at least.

Some more now from the House of Commons, where MPs are reacting to John Healey's statement.

Treasury Select Committee Chair Meg Hillier welcomed large parts of the Budget, pointing to the previous Tory government for many of the shortcomings.

On Plan 2 student loans - and its absence from the Budget - Hillier says intergenerational fairness is a big strand of concerns among those in her committee.

But she says the plan was designed by Badenoch's government and it was "a ticking time-bomb left for this generation to pick up".

Hillier is "saddened" there weren't changes to the thresholds at which repayments are made, she hopes the chancellor can consider changes to ensure "that generation has one less burden upon them".

John Healey says today's budget has offered people "breathing space" with pressure on their finances. Here's how the key announcements affect you and your money:

Help with your energy bill: If you are living in a home in council tax bands A to D in England, you will receive a one-off £100 "Household Energy Payment" from January, funded by extra tax on banks.

Gas standing charges scrapped: Gas standing charges will be scrapped in England, Scotland and Wales, during 2027 "or as soon as possible after", the chancellor said. These fixed daily fees will be shifted onto the price of each unit of energy.

Fuel duty cut extended: The 5p "temporary" cut in fuel duty on petrol and diesel, introduced by Rishi Sunak in 2022, will be extended to July. It was scheduled to be phased out from January. It means drivers will still pay the levy at 52p per litre.

Minimum wage increased: Minimum wage rates will rise by 3.9% in April. However, these figures mean, this time around, there's no progress on Labour's manifesto promise to narrow the gap in minimum wages between older and younger workers.

State pension to rise: The triple lock policy means that the state pension will go up in line with average wage increases, at 3.9%.

• Read more about these policies in our news story.

Chancellor John Healey has now delivered this year's Budget, which MPs are currently debating in the Commons. You can watch that live at the top of the page.

As a reminder, though, there's more...

If you head to the watch & listen tab at the top of the page, we also have:

• An audio-only feed covering all the main events from BBC Sounds
• A Politics Live stream, featuring plenty of interviews, analysis and reaction
• On Youtube and TikTok, the BBC is delving into what the budget means for you - a panel of experts are talking all things housing, education and jobs
• And a little later on, there's a special programme answering your questions on the Budget at 17:30 GMT

Image source, UK Parliament

We've just heard Conservative leader Kemi Badenoch's first response to the Budget in the Commons. Here's a recap:

• Badenoch says she predicted last year that Reeves's Budget would be her last, saying Healey now has "a big job to do, cleaning up her mess"
• But she says the Budget is "not good enough, not strong enough, not bold enough"
• Next year the UK's tax burden will be "the highest in our country's history", she says and the UK remains "overspent, overborrowed, overtaxed and drowning in an out-of-control welfare system"
• Badenoch says there are "some things" in the Budget she welcomes - she thanks the chancellor for "breaking Labour's pledge on the minimum wage for young people" and welcomes his "U-turn on ISAs"
• For context: Labour's manifesto pledged to remove "discriminatory age bands" - today Healey announced a 3.9% rise in both the minimum wage for young people and for other workers on the national living wage, meaning the gap between the two has not changed
• Healey also confirmed he will not go ahead with the cut to the tax-free amount that people can put into a cash ISA - it will remain at £20,000 annually.
• Badenoch ends by saying "let's cut spending, cut the deficit, fund defence, cut people's taxes", and adds that is what her party would have done and that will be the choice at the next election