How much was the forecast cut?
The main blow fell on 2027. The OBR lowered its growth estimate from 1.6% to 1.0%. That is minus 0.6 percentage points.
The new OBR figures are compared with the March ones. The GDP forecast looks like this:
- 2026 - 1.2% versus 1.1%
- 2027 - 1.0% versus 1.6%
- 2028 - 1.6% unchanged
- 2029 - 1.8% versus 1.5%
- 2030 - 1.7% versus 1.5%
- 2031 - 1.6%
What is happening with debt?
On debt, the picture is worse than in spring. The budget deficit is 4.2% of GDP this year and 3.4% next year.
- 83.2% of GDP - public sector net financial liabilities in 2026/27 versus 82.6% previously
- 83.8% of GDP - the same measure in 2027/28 versus 82.9%
- £14 billion - additional spending on debt servicing this year
Healey explained these £14 billion by the rising global cost of borrowing.
What does the minister promise?
- No tax rises. There will be no broad tax increase.
- No welfare cuts. Deep cuts to social spending are not planned.
- The rules stay the same. The fiscal rules are retained.
- Part of the reserve is earmarked. The money will go toward the consequences of the war in Iran and protecting households from rising energy prices.
How did the market react?
The reaction was calm. The yield on 10-year UK government bonds continued to fall to 5.34% (-1.4 basis points for the day).
- GBP/USD - 1.3284, down 16 points
- after the publication of the budget headlines, the pair barely moved
The £15 billion buffer matched the consensus in a Reuters poll of economists. There was no surprise for the debt market.
What does this mean for a trader?
The main point: the cushion is thin. With weak growth, expensive debt servicing and geopolitics, Britain has almost no room for economic disappointments.
The next UK releases are convenient to track in the economic calendar. It is worth checking the rules for trading the news in advance in the challenge terms.
Were you in the pound during the budget?
A day like this for the pound is an hour of choppy moves around the headlines. The result is decided by a couple of minutes, not by analyzing the OBR forecasts. At some prop firms, the window around the budget and the minister's speech is closed entirely. At others, only the position size is limited, and at others it is a normal working session. The difference surfaces not on the advertising page, but at the moment the account has already been paid for. It is fairer to check access to news trading and the list of currency pairs in advance.