Budget 2026 explained
28 October 2026 · John Healey. What the OBR's October 2026 forecast says about the economy and the public finances, compared with its March 2026 forecast, in four chapters.
1. Growth and incomes
How the forecast for the economy, prices and household incomes has changed.
Growth forecast cut for 2027
Real GDP growth, per cent, by calendar year.
The OBR now expects the economy to grow 1.0% in 2027, down from 1.6% in its March 2026 forecast.
March 2026 forecastOctober 2026 forecast
No March 2026 forecast for 2031.
Office for Budget Responsibility · October 2026 Economic and fiscal outlook: charts and tables · Published 28 Oct 2026 · Licence terms · Source data · Methodology
Inflation forecast higher for the next two years
CPI inflation, per cent, by calendar year.
CPI inflation is forecast at 3.4% in 2027, up from 2.0% in the March 2026 forecast.
March 2026 forecastOctober 2026 forecast
No March 2026 forecast for 2031.
Office for Budget Responsibility · October 2026 Economic and fiscal outlook: charts and tables · Published 28 Oct 2026 · Licence terms · Source data · Methodology
Real income per person forecast to fall in 2026-27
Growth in real household disposable income per person, per cent, by financial year.
Real household disposable income per person is forecast to change by −0.6% in 2026-27, against 0.5% in the March 2026 forecast.
March 2026 forecastOctober 2026 forecast
No March 2026 forecast for 2031-32.
Office for Budget Responsibility · October 2026 Economic and fiscal outlook: charts and tables · Published 28 Oct 2026 · Licence terms · Source data · Methodology
Ten-year growth in household income per person
Rolling 10-year average growth in real household disposable income per person, per cent.
Over the ten years to 2026-27, real household income per person grew by an average of 0.4% a year. The series starts with the ten years to 1965-66, at 2.7% a year.
Office for Budget Responsibility · October 2026 Economic and fiscal outlook: charts and tables · Published 28 Oct 2026 · Licence terms · Source data · Methodology
2. Borrowing and interest
How much the government is forecast to borrow, and what its debt costs.
Borrowing forecast higher in every year than in March 2026
Public sector net borrowing, £ billion, by financial year.
Borrowing in 2026-27 is now forecast at £133.2bn, up from £115.5bn in the March 2026 forecast.
March 2026 forecastOctober 2026 forecast
No March 2026 forecast for 2031-32.
Office for Budget Responsibility · October 2026 Economic and fiscal outlook: charts and tables · Published 28 Oct 2026 · Licence terms · Source data · Methodology
Debt interest forecast to match its 2022-23 high
Debt interest spending, per cent of GDP, outturn and October 2026 forecast, with the March 2026 forecast.
Debt interest is forecast at 4.2% of GDP in 2031-32. The highest year so far was 2022-23, at 4.2% of GDP.
Office for Budget Responsibility · October 2026 Economic and fiscal outlook: charts and tables · Published 28 Oct 2026 · Licence terms · Source data · Methodology
3. The Budget's plan
What the Budget's decisions do to borrowing, and the forecast for taxes and debt.
Decisions add to borrowing at first, then reduce it
Direct effect of this event's policy decisions on borrowing, £ billion. Above zero adds to borrowing; below zero reduces it.
The decisions add £7.6bn to borrowing in 2026-27 and reduce it by £11.7bn in 2031-32.
Adds to borrowingReduces borrowing
Office for Budget Responsibility · October 2026 Economic and fiscal outlook: charts and tables · Published 28 Oct 2026 · Licence terms · Source data · Methodology
The tax burden rises to a record high
National Accounts taxes, per cent of GDP, outturn since 1948-49 and forecast.
Taxes are forecast to reach 38.6% of GDP by 2031-32. The highest year so far was 1948-49, at 37.2% of GDP. The series starts in 1948-49.
Office for Budget Responsibility · October 2026 Economic and fiscal outlook: charts and tables · Published 28 Oct 2026 · Licence terms · Source data · Methodology
Debt forecast to peak in 2027-28, then fall
Public sector net financial liabilities, per cent of GDP, by financial year.
Net financial liabilities are forecast to peak at 83.8% of GDP in 2027-28 and to be 81.7% of GDP by 2031-32.
March 2026 forecastOctober 2026 forecast
No March 2026 forecast for 2031-32.
Not shown: 2025-26, which has no October 2026 figure in this OBR table.
Office for Budget Responsibility · October 2026 Economic and fiscal outlook: charts and tables · Published 28 Oct 2026 · Licence terms · Source data · Methodology
Debt came in below the July 2020 forecast
Debt as a share of GDP: past OBR forecasts against the outturn, as shown in the OBR Forecast evaluation report.
For 2024-25, debt was 93.2% of GDP of GDP. The July 2020 forecast was 102.1% of GDP, an over-forecast of 8.9 percentage points.
Office for Budget Responsibility · Forecast evaluation report: charts and tables, chart 'Debt as a share of GDP' · Licence terms · Source data · Methodology
4. The measures
How many measures each event had, as scored by the OBR.
Measures scored at each fiscal event
Number of tax and spending measures at each event in the OBR policy measures database. Below: their average size in the third year, ignoring sign.
Budget 2026 had 98 measures scored by the OBR. The most at any event since 2010 was 252, at Budget 2025.
Measures (Budget 2026 in blue)
Average size of a measure in its third year, £ billion
Average size, either sign
Office for Budget Responsibility · Policy measures database · Published 28 Oct 2026 · Licence terms · Source data · Methodology
HM Treasury's analysis of the effect on households by income is not loaded here yet. Every scored measure is on the Budget 2026 page.