OBR cautions about Middle East war dragging down growth and triggering a fresh cost of living crisis

• Healey offers £100 payment to households to help navigate ‘global economic storms’

• Budget 2026: key points at a glance

• Budget 2026 live – latest updates

British households face a “pretty grim picture” for living standards as the war in the Middle East drags down growth and triggers a fresh cost of living crisis, the government’s independent forecaster has said.

In a report as John Healey announced his first budget, the Office for Budget Responsibility (OBR) issued a sharp downgrade for growth in 2027, household disposable incomes and the public finances despite the measures taken by the chancellor.

Payment to 20m homes part of package to help cut energy bills and ease cost-of-living crisis, paid for by smaller than expected bank windfall tax

• Budget 2026: key points at a glance

• Budget 2026 live – latest updates

John Healey promised to steer Britain through “global economic storms,” as he announced a package of measures to cut consumers’ energy bills, funded by a smaller-than-expected windfall tax on banks.

In his first budget, the chancellor said 20m households in council tax bands A to D would receive a £100 payment – a measure he said would cost £2.6bn.