Budget 2025 - Digging Deeper If You Have The Stamina

26th November 2025

This Budget takes the fair and necessary choices to deliver on the government's promise of change:

Cutting the cost of living by tackling inflation and taking around £150 off energy bills on average from April next year, and implementing a one-year freeze on regulated train fares and prescriptions charges.

Cutting the NHS waiting list in England, supported by 5.2 million more appointments delivered since the start of the Parliament and by creating 250 new Neighbourhood Health Centres.

Cutting debt and borrowing, to reduce the amount spent on debt interest rather than public services and to support the Bank of England to get inflation and interest rates down.

These choices strengthen Britain's economic foundations and set the course for a secure future for the country.

Since the start of this Parliament, Britain has:

Outperformed growth forecasts, with growth in 2025 upgraded to 1.5% from 1% in March, and is on course to be the second-fastest growing economy among G7 countries.

Seen real wages increase more than in the decade from 2010.

Struck three trade deals, with the US, India and the EU. The India free trade agreement alone could increase GDP by over 0.1% in the long term.
Seen the Bank of England cut interest rates five times.

The choices taken at Autumn Budget 2024 and over the Parliament have begun to deliver on the government's mandate for change:

Increased funding to fix the NHS has seen waiting lists fall, with 5.2 million more appointments delivered.

Provided over £120 billion in additional capital investment for roads, rail and energy, including £15.6 billion for major city-region transport. The Office of Budget Responsibility (OBR) estimates that the uplift in public investment will raise potential output by around 0.4% over 10 years.
Implemented ambitious regulatory reforms with a target to reduce the annual admin burden on business by £5.6 billion by the end of the Parliament.

Reformed the National Planning Policy Framework, delivering 170,000 additional homes and boosting GDP by 0.2% by 2029-30.

The government's plans are underpinned by its non-negotiable fiscal rules which provide credibility by ensuring day-to-day spending is met with revenues, while allowing the step change needed in investment to grow the economy.

But, despite this progress, for many working people and businesses, the economy is not working well enough, and people are still struggling with the cost of living.

Reflecting historical economic underperformance, the OBR has revised down its productivity forecast. In isolation this reduces the amount of revenue the OBR expects the government to collect by around £16 billion in 2029-30.

The government is determined to outperform this forecast by continuing its plans to grow the economy, protecting public services and cutting borrowing.

But it is right to plan based on the independent forecaster's judgements, meaning, despite Britain's progress, the government needs to strengthen the public finances.

So at Budget 2025, the government is doubling down on its plans and the economic and fiscal strategy it set last autumn by:

Relentlessly pursuing growth to create a secure future through an ambitious growth strategy, including supply-side reforms. The OBR’s downgrade shows the imperative of this programme.
Taking the responsible choice to get borrowing down and increase the government’s fiscal buffers.
Fixing the failings of the welfare system to stop people being written off due to sickness and to lift 450,000 children out of poverty.
Protecting and strengthening the NHS and other public services while ensuring public money is well spent.
Making the tax system fairer and fit for 21st-century Britain.
Taking decisive action to cut the cost of living and bring down inflation.
Relentlessly pursuing growth
The OBR’s revised productivity outlook demonstrates the need for the government’s supply-side reforms. At this Budget, the government is going further:

Investing for the future: This Budget protects increased public investment over the Parliament and delivers the infrastructure needed to drive growth. The government is also investing almost £900 million to complete the publicly funded works for the Lower Thames Crossing; boosting capital investment in the NHS by £300 million; and establishing the Leeds City Fund as a 25-year Business Rates Retention Zone, underlining its commitment to the Northern Growth Corridor.
The government is also making further planning reforms to accelerate delivery of housing and infrastructure; empowering local and regional leaders to boost growth in their areas; and strengthening the UK’s nuclear capacities to increase energy security.

Backing business and unlocking innovation: The government is making it easier for entrepreneurs to start, scale and stay in the UK, with tax changes to incentivise greater investment into scaling companies, a new UK Listing Relief from Stamp Duty Reserve Tax, and reforms to the UK research and development (R&D) system. This will support the UK’s modern Industrial Strategy. The high street will benefit from permanently lower business rates for retail, hospitality and leisure, funded by higher rates for the most expensive properties such as warehouses used by large online retailers. The government will also stick to the commitments set out in the corporate tax roadmap, to provide businesses certainty, and make targeted changes to the capital allowances treatment of main rate assets in a way that preserves the value of relief for future investment.

Unleashing talent and opportunity: The government is making over £1.5 billion available across the spending review period into the Youth Guarantee and the Growth and Skills Levy. This will tackle the elevated number of people not in education, employment or training (NEET) rates, with the Youth Guarantee ensuring all young people aged 16-24 years old have access to the support they need to earn or learn. Reforms to the visa system will make sure UK businesses have access to the brightest and best global talent.

Taking the responsible choice to get borrowing down and increase the government’s fiscal buffers
Budget 2025 continues to deliver the government’s fiscal strategy: putting the public finances on a sustainable footing to give businesses and households the certainty they need, while increasing investment to grow the economy:

The government is cutting debt and borrowing - keeping to its tough fiscal rules. The OBR confirms the government is meeting the stability rule in 2029‑30 by £21.7 billion and the investment rule by £24.4 billion, and meeting the stability rule a year early.

The government is more than doubling the buffer against the stability rule. A higher buffer means more stability for working people and businesses, by reducing the need to change tax and spending plans when there are changes in the economy.
Policy at this Budget means borrowing falls in every year of the forecast with the UK forecast to reduce borrowing by more than any other G7 country.

Big Report From the Treasury HERE

The Full Budget Report
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