Budget 2026: John Healey unveils £15bn headroom, falling debt, and revised growth forecasts

Chancellor John Healey has delivered Budget 2026 against a backdrop of global uncertainty, insisting the government will meet its fiscal rules on day-to-day spending and falling debt. The Office for Budget Responsibility (OBR) confirms £15bn of headroom in 2029-30 and £20bn in 2030-31, with borrowing set to decline from 4.2% of GDP this year to 1.8% by 2030-31. Healey said earlier predictions of slowing growth were wrong: the OBR now expects GDP to grow by 1.2% this year, 1% next year, and then gradually rise to 1.8% in 2029. Government debt is forecast to peak at 83.8% of GDP next year before falling to 81.7% by 2030-31. The budget signals a cautious but stable fiscal path amid global pressures, betting on modest growth and falling debt to reassure markets and voters. The key question is whether those forecasts hold as international headwinds persist.