On November 26th, the UK Budget was finally released, after much speculation as to what it  would eventually consist of. The budget focused on energy costs, taxation, and measures to support households and businesses. Chancellor Rachel Reeves outlined policies aimed at easing living expenses, while addressing fiscal challenges deriving from the loss of fiscal revenues and the manifesto pledges she does not want to break.

The budget introduced cuts to household energy bills averaging £134 per year from April 2026, which will be achieved by shifting renewable subsidies into general taxation and ending the Energy Company Obligation scheme. This move is designed to reduce pressure on families, while aligning with climate goals. Alongside this, the government confirmed a freeze on fuel duties  until 2026, though gradual reversals of previous cuts are planned. To offset declining revenues from petrol and diesel, a “pay-per-mile” levy on electric vehicles will be introduced from 2028.

Regarding  taxation, Reeves extended the freeze on income taxes and National Insurance thresholds until 2031, effectively increasing the tax burden as wages rise. A new levy will apply to properties valued above £2 million, adding over £2,500 annually to such households. Dividends, savings, and property income will also face higher taxation from 2027, while the Cash ISA limit will be reduced to £12,000.

For welfare and pensions, the State Pension will rise by 4.8% in April 2026, benefiting 13 million pensioners. Universal Credit will increase by 6.2%, with the two-child limit lifted, marking a significant change in social policy. The National Minimum Wage will rise by 4.1%, and prescription charges in England will remain frozen. Travel and business were also impacted: the Air Passenger Duty will rise from April 2026, particularly affecting long-haul and premium travel. Rail fares in England will be frozen, offering some relief to commuters. Overall, the budget balanced short-term household support with long-term fiscal tightening, reflecting Labour’s attempt to manage economic pressures while preparing for future elections.

In the end, it seems to be a very old-fashioned, old Labour “tax and spend” budget, with very little devoted to promoting  growth. There was nothing on digital assets (where the UK could play a major role, which currently it is not) or other growing sectors of the economy, such as bio-tech, defense-tech, etc. It is possible that manifesto promises have not been broken, but at the same time the mantra of not leaving any stone unturned to find growth was not followed either. Without some courageous decisions, growth will not return to the UK, which remains badly hit by the impact of Brexit. Except now, Labour seems ready to start using this argument, possibly to bring the UK back into the European customs union, at the very least.