The £4.4bn cost of living support package announced in John Healey’s budget yesterday is “badly targeted”, which means that even families receiving help face higher energy bills than during the last energy price shock, according to the Resolution Foundation.
The poorest half of households will gain £158, on average, from support measures this year and next – only £14 more than the £144 received by the richest half – highlighting a “complete failure to target help at those who need it most”, the thinktank said.
Typical energy bills net of support are forecast to be £1,750 this year (2026-27) – higher in real terms than during the last energy price shock (2022-23) when net bills were £1,685.
The chancellor raised taxes on banks and landlords to fund a £100 winter handout for 20 million households as official forecasts made clear there is no end in sight for the cost of living crisis.
The Resolution Foundation’s analysis found that UK tax rises stand out globally. The UK’s internationally remarkable consolidation in its public finances, touted by the chancellor in his budget speech, is entirely due to a rising tax take during the current parliament. The £76bn improvement in the UK’s primary balance – the gap between receipts and non-interest spending – between 2023-24 and 2028-29 is more than fully accounted for by £107bn of higher tax revenues.
Whitehall gets a bigger boost than households. The budget included a £9bn top-up to departmental budgets over the current spending review period – twice as much as the £4.4bn cost of living support package.
Past gain, future pain for living standards. Median real annual disposable incomes for working age households are set to grow by a paltry £600 over the course of the parliament. Worse still, those gains are already behind us. Between now (2026-27) and the end of the parliament (2028-29), typical incomes are forecast to fall by £1,050 (3%).
Today’s key events
• 9am GMT: UK joint water regulator report on company performance
• 9.30am GMT: Bank of England consumer credit and mortgage approvals for September
• 10am GMT: eurozone consumer confidence for October
• 10.30am GMT: Institute for Fiscal Studies verdict on UK budget
• 12.30pm GMT: US GDP for third quarter
• 1.15pm GMT: European Central Bank interest rate decision
• 1.45pm GMT: ECB press conference
We’ll be tracking all the main events throughout the day on our business live blog …
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