Healey "does little" to boost growth or tackle spending bill as can gets kicked down the road

This was a budget designed not to rock the boat, and on that score, it succeeded. The partial rebuilding of the fiscal headroom to £15bn should satisfy the bond vigilantes for now. However, at roughly 0.4% of GDP, the buffer is modest by historical standards and won’t fully dispel fears of further tax rises before the next fiscal event. The Iran-related shock has cut the 2027 growth forecast to just 1.0% from 1.6%, while debt interest costs are £14bn higher than planned this year, leaving the government with less room for error.

Tax and spending measures were targeted and modest. The 3-percentage-point rise in the bank surcharge to 6% is painful, but temporary and smaller than feared. Extending the electricity VAT cut and fuel duty freeze to July, alongside a £100 payment to 20 million households, offers some near-term relief on inflation, though the effect is marginal and will reverse in the summer. The 3.9% rise in the minimum wage pulls the other way, adding to the wage pressures closely watched by the Bank of England.

This is not a game-changing budget. It offers mild relief and a few eye-catching headlines, but does little to boost growth or tackle an ever-growing public spending bill. With welfare reform deferred, the public finances are left vulnerable to the next shock. Sterling and gilts have taken it in their stride, but with only a thin buffer, both remain exposed to weaker growth or a further rise in global borrowing costs. The can has been kicked, but the road is getting shorter.