***BLOOMBERG BUDGET ANALYSIS***

John Healey’s modest budget achieved his main aim of avoiding an adverse market reaction.

But the cost-of-living support is small and will be swallowed up by coming rises to bills.

It is a long way off Andy Burnham’s pledge to rip up 40 years of neoliberalism and transform the economy.

And it could be out-of-date within days if Trump escalates against Iran and causes another energy price shock.

The question is: does this budget really meet voters’ expectations of the change Burnham is promising and mean Labour’s popularity continues to improve? Or will it mark a turning point as Healey struggles to live up to the PM’s rhetoric within the constraints of the manifesto, global headwinds and fiscal reality?

The IFS characterises the budget as “lots of fiddling, short-term things.” The Resolution Foundation says Healey has “spread the jam thin.” Kemi Badenoch asks: “Is that it?” Will this narrative take hold, or will Britons continue to be won over by the force of Burnham’s personality?

It also seems fair to ask what happened to his big ambitious ideas? There was not much on “public control” and nationalisation today. The council house building programme isn’t so revolutionary. There were no major reforms to council tax, capital gains tax, stamp duty, a land value tax, cutting the personal tax threshold, as he’s previously floated.

Healey’s commitment to spend 3% of GDP on defence by 2030 won immediate praise from Zelenskyy and NATO. But deferring the decision on how to fund it means the next year will be very tough for the government. The spending review and next budget look painful, with big welfare cuts and tax rises likely needed.

The immediate fear in cabinet is Trump and Iran. UK officials believe it is likely the US military campaign is going to resume shortly. Resolution suggests that if there is serious escalation there it would wipe out Healey’s £15 billion headroom: “He doesn’t have enough to survive one bad roll of the dice.”

It leaves Burnham’s fate in the hands of Trump. That gives a whole new meaning to his strategy of “hope.”

With @PhilAldrick: https://www.bloomberg.com/news/articles/2026-10-28/burnham-s-budget-hopes-for-the-best-in-turbulent-times-for-uk?srnd=undefined