{"id":441021,"date":"2026-10-28T20:40:06","date_gmt":"2026-10-28T13:40:06","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/uk-budget-growth-forecasts-cut-as-healey-unveils-15-billion-fiscal-buffer-441021\/"},"modified":"2026-10-28T20:40:06","modified_gmt":"2026-10-28T13:40:06","slug":"uk-budget-growth-forecasts-cut-as-healey-unveils-15-billion-fiscal-buffer","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/uk-budget-growth-forecasts-cut-as-healey-unveils-15-billion-fiscal-buffer-441021\/","title":{"rendered":"UK budget: Growth forecasts cut as Healey unveils \u00a315 billion fiscal buffer"},"content":{"rendered":"<div>\n<p>The Office for Budget Responsibility (OBR) lowered its near-term growth forecasts but the government still expects to meet its fiscal rules, with \u00a315 billion of headroom at the end of the forecast period.<\/p>\n<p>The headline growth revisions:<\/p>\n<ul>\n<li>\n<p>2026 GDP: 1.2% vs 1.1% in March<\/p>\n<\/li>\n<li>\n<p>2027 GDP: 1.0% vs 1.6% in March<\/p>\n<\/li>\n<li>\n<p>2028 GDP: 1.6% vs 1.6% in March<\/p>\n<\/li>\n<li>\n<p>2029 GDP: 1.8% vs 1.5% in March<\/p>\n<\/li>\n<li>\n<p>2030 GDP: 1.7% vs 1.5% in March<\/p>\n<\/li>\n<li>\n<p>2031 GDP: 1.6%<\/p>\n<\/li>\n<\/ul>\n<p>The sharp downgrade to 2027 is the standout number, with growth now expected at just 1.0%. The revisions further out are more constructive but that&#8217;s the usual tactic.<\/p>\n<p>On the fiscal side, the numbers show a deterioration in the debt outlook:<\/p>\n<ul>\n<li>\n<p>2026\/27 public sector net financial liabilities: 83.2% of GDP vs 82.6% previously<\/p>\n<\/li>\n<li>\n<p>2027\/28: 83.8% vs 82.9%<\/p>\n<\/li>\n<li>\n<p>2028\/29: 83.8% vs 82.9%<\/p>\n<\/li>\n<li>\n<p>2029\/30: 83.1% vs 82.2%<\/p>\n<\/li>\n<li>\n<p>2030\/31: 82.3% vs 81.1%<\/p>\n<\/li>\n<li>\n<p>2031\/32: 81.7%<\/p>\n<\/li>\n<\/ul>\n<p>The OBR also forecasts a budget deficit of 4.2% of GDP this year, narrowing to 3.4% next year. Public sector net borrowing is projected at 1.8% of GDP in 2030\/31, compared with 1.6% in the March forecast.<\/p>\n<p>Healey said the government will spend an additional \u00a314 billion on debt interest this year, underscoring the damage from higher global borrowing costs.<\/p>\n<p>The chancellor ruled out broad-based tax increases and deep cuts to public services, while pledging to maintain the government&#8217;s fiscal rules. Some of the remaining fiscal headroom will be used to absorb the impact of the Iran war.<\/p>\n<p>The \u00a315 billion buffer is substantially below the \u00a323.6 billion projected in March, but is broadly in line with the \u00a315 billion expected in a Reuters poll of economists.<\/p>\n<p>The market reaction has been relatively calm so far, with the UK 10-year gilt yield extending its decline to 5.34%, down 1.4 basis points on the day.<\/p>\n<p>The bigger picture is that Healey has managed to preserve some fiscal breathing room despite a much more challenging environment. However, \u00a315 billion isn&#8217;t a particularly large cushion for an economy facing weak growth, elevated debt-servicing costs and considerable geopolitical uncertainty.<\/p>\n<p>The bond market is likely to take some comfort from the commitment to fiscal discipline, but the downgrade to 2027 growth is a reminder that Britain has little room for economic disappointment.<\/p>\n<p>For sterling, the budget looks broadly neutral for now. There is no obvious fiscal shock to drive a selloff, but there is also little here to materially improve the UK&#8217;s growth outlook. It was last down 16 pips to 1.3284 on the day and little changed since the budget headlines.<\/p>\n<p>                            This article was written by Adam Button at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Office for Budget Responsibility (OBR) lowered its near-term growth forecasts but the government still expects to meet its fiscal rules, with \u00a315 billion of headroom at the end of the forecast&hellip;<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-441021","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/441021","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=441021"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/441021\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=441021"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=441021"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=441021"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}