U.K. Chancellor John Healey unveiled his first Autumn Budget on October 28, 2026, featuring a comprehensive set of initiatives aimed at addressing the cost-of-living crisis while maintaining fiscal discipline. Key measures include the removal of standing charges on gas heating bills, extension of tax relief on electricity for millions, and targeted payments to households in lower local housing tax bands, totaling £2.6 billion. Additionally, tariffs on over 100 grocery items will be removed, and businesses in retail, hospitality, and leisure sectors will benefit from extended business rate relief. The budget also raised the minimum wage by 3.9% and reversed a planned reduction in tax-free savings allowances, offset by reforms to pensions and sickness benefits to reduce welfare spending.

Healey emphasized the necessity for the government to take a proactive role in the burgeoning artificial intelligence sector, pledging significant funding toward AI security and sovereignty. The government introduced a covenant for data centers, setting stringent requirements for local community investment and environmental protections in exchange for grid access and onsite generation. Supportive tax measures for founders, including reduced capital gains tax rates on gains up to £10 million, were announced alongside investments in regional innovation hubs designed to bolster Britain’s technology leadership.

Defense spending saw a notable boost with an additional £10 billion committed to economic and military aid for Ukraine. Healey reassured parliament of the U.K.’s long-term commitment to meeting NATO defense spending targets, aiming for 3% of GDP by 2030 and 3.5% by 2035. This reflects an acknowledgment of heightened security threats and the need to strengthen national defense capabilities in an increasingly uncertain geopolitical landscape.

To fund the budget’s measures without raising taxes on wages or dividends, Healey imposed increased levies on banks, gambling businesses, and vape shops. The bank surcharge will rise by 3 percentage points to 6%, a move welcomed cautiously by the financial sector, with shares in major British banks such as Barclays and Lloyds Banking Group rising following the announcement. While JPMorgan Chase criticized the additional taxes on banks, the government maintains that these institutions can afford to contribute significantly to easing financial pressures on households and businesses across the U.K.