Healey's First Budget: Banks, Landlords and Gamblers Pay More

By Grace Kim

Banks, landlords and gambling firms will pay more as Chancellor John Healey delivers his first budget, opening what The Guardian's editorial board calls the construction of "a fairer economy and a more active state" in the middle of a cost-of-living crisis.

The budget landed on October 28, 2026, and it split its audience almost immediately. The Guardian's editorial calls Healey's first budget "a Rorschach test" — the same document reads differently depending on who's looking.

Supporters saw dozens of individual measures offering "breathing space" to a public worn down by rising prices. Critics conceded there were plenty of announcements but argued that each one was "modest in value." Both camps, the editorial notes, are reacting to the same underlying reality: this budget is more ambitious about how the state can protect people than about how much it spends.

The verdict from the editorial board is measured but clear. Healey has taken "a small step in the right direction — a tricky feat in a turbulent world." But an economy marked by entrenched inequality and more than a decade of stagnation, the piece argues, will need "a bigger stride."

What does the OBR forecast say?

The hardest numbers in this story come from the Office for Budget Responsibility, and they frame the budget's central weakness.

The OBR's outlook on living standards paints what the editorial describes as a "pretty grim picture." The core problem is timing: the budget's relief is temporary, while the squeeze on households persists.

Here's the arithmetic that matters:

• Households are expected to move from saving roughly £50bn in 2026 to borrowing roughly the same amount in 2031, as the government deficit shrinks and company profits recover.
• By 2031, mortgage repayments are expected to reach 4.25% of household disposable income — the highest level since 2009.
• The OBR expects growth to recover from 1% in 2027 to 1.8% in 2029.

The takeaway in plain words: the official forecast says households will spend the next five years running down their buffers, not rebuilding them.

Why the growth numbers sit uneasily with Labour's promises

There's a tension inside the OBR's numbers that the editorial flags directly. Weak worker "bargaining power," the forecast finds, is what allows firms to rebuild their profit margins over the same period that household finances deteriorate.

That dynamic — corporate margins recovering while wage leverage stays soft — "sits uneasily with Mr Healey's promises to working people," the editorial states.

It's a pointed phrase for a Labour chancellor. The budget's headline politics lean on protecting working households: the new burden falls on banks, landlords and gambling firms, not on payslips. But the forecast underneath suggests the recovery's gains will flow disproportionately to company profits, with workers' bargaining position too weak to claim a larger share until at least 2029.

What comes next?

The editorial frames the budget as a down payment rather than a destination. Dozens of measures, each individually modest, add up to a directional shift: a state doing more, funded by sectors that have done well.

But the OBR's numbers set the clock. If mortgage burdens hit their highest share of disposable income since 2009 by 2031, and households flip from £50bn of saving to £50bn of borrowing, the political question is whether Healey's "small step" buys enough breathing space before the squeeze returns.