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UK Chancellor John Healey blames global economic turmoil and the Middle East war for rising inflation, higher oil and gas prices and mounting pressure on public finances, while pledging fiscal discipline and economic stability.
The UK government is set to spend an additional £14 billion on debt interest this year, Chancellor John Healey said as he began his budget speech, warning that global economic turmoil and the war in the Middle East are putting pressure on Britain’s economy and public finances.
Healey said the conflict had contributed to higher oil and gas prices, pushing inflation higher and increasing costs for households and businesses. He added that the latest forecast from the Office for Budget Responsibility (OBR) identified the war in the Middle East as a key factor shaping the economic outlook.
“We did not want this war and we rejected calls to jump into it,” Healey said, highlighting the economic consequences of the conflict for Britain.
The additional debt interest spending underscores the fiscal challenges facing the government as it seeks to manage rising costs while maintaining economic stability.
Opening his budget address, Healey described the measures as a budget for the “working people of Britain” and businesses of all sizes. He said the plan was built on “fiscal discipline” and would provide the country with some “breathing space” amid heightened global uncertainty.
The chancellor said the government’s economic strategy would seek to steer Britain through the current global economic storms and establish a new direction for the country’s economy.
More from BusinessHealey also paid tribute to his predecessor, Rachel Reeves, the UK’s first female chancellor, crediting her with strengthening fiscal discipline, boosting investment and taking steps to reduce NHS waiting lists.
He said the Labour government’s new economic approach would be guided by the vision of its new prime minister.
