'Painful' years ahead, think tanks warn, as living standards set to fall People are facing a painful and depressing few years ahead, economic think tanks have warned, after forecasts showed growth in living standards grinding almost to a halt. Typical working-age households would see their disposable income fall by £1,050, or 3%, between now and 2029, according to the Resolution Foundation, while the Institute for Fiscal Studies (IFS) said the current decade would be the worst for household income growth on record. Chancellor John Healey said his Budget offered breathing space, but said the government could never remove completely cost of living pressures. The UK's official forecaster said its latest economic forecast painted a pretty grim picture. The Office for Budget Responsibility (OBR), blamed the difficult financial situation facing the UK on higher borrowing costs and inflation caused by the US-Iran war.

John Healey talked of charting a new course for Britain, but this Budget was more about course-correcting than charging down a new path. It was abundantly clear that the financial fallout from that conflict in the Middle East has hampered the finances of households and businesses - and the government's ability to help. While the government targeted those impacted by higher energy and fuel bills, the breathing space it aimed to provide was limited; it is a pill that doesn't fully alleviate the pain. The most telling evidence was that official forecasters predict that while earnings will rise, that is not compensating for higher prices and taxes. Even after the extra help is taken into account, households' incomes after inflation and tax are set to be typically lower across the next two years than the start of the parliament, a sign of how much the war has blown prosperity off course.

Tax on banks, energy bill help and minimum wage rise - what could be in the Budget? Chancellor John Healey will set out Labour's tax and spending plans when he delivers his first Budget at around 12:30 on Wednesday. The speech, which usually lasts about an hour, will be broadcast live on BBC iPlayer and on the BBC News website. He and Prime Minister Andy Burnham are hoping to give households breathing space amid the ongoing high cost of living. But Healey has also refused to rule out some tax increases to potentially pay for support he could distribute elsewhere.

Healey vows cheaper marmalade and gherkins in pre-Budget package of'everyday fixes' John Healey will remove import taxes on marmalade, gherkins and more than 100 products in a bid to give families breathing space with the cost of living at the Budget . The chancellor on Wednesday will promise a fresh series of everyday fixes to ease the pressure on households. The measures will also include an end to the so-called cliff-edge for those receiving carer's allowance payments and higher tax-free mileage rates being made permanent. But the Conservatives said the offer of cheaper gherkins was an insult to families hammered by Labour's tax rises. Ahead of the Budget, the government said it is removing tariffs on more than 100 family favourite products, while supporting farmers facing higher fertiliser costs and households reliant on heating oil.

Healey's Budget needs to sustain the stronger economy through gathering clouds There have been almost no Budget leaks. The chancellor's aides are using intelligence-style security measures to guard its secrets: the Budget has been split into compartments with very few given access to all of them. The IT has been locked down and ministers viewing the plans have to sign a digital promise not to brief media. Such security is a response to the feeling that speculation around the last Budget, sometimes informed by insiders, was economically destabilising. As a recent former defence secretary, Chancellor John Healey has embraced such strict procedures, and has approached most of his public engagements and interviews with a sturdy refusal to break the Budget omertà, akin to his fellow Yorkshireman Geoffrey Boycott's at times ultra-defensive stance on a cricket pitch. The economic news has been good - growth has been better than expected and the International Monetary Fund has endorsed the UK for standing out among the G7 countries for at least planning to cut borrowing.

Chancellor of the Exchequer, John Healey, aims to harness the opportunities of AI to raise living standards and boost UK's economic growth. Chancellor of the Exchequer, John Healey, aims to harness the opportunities of AI to raise living standards and boost UK's economic growth. John Healey pledges to use budget to harness power of AI to bolster Britain's security Chancellor says government to commit hundreds of millions to develop'distinctively British' approach to AI John Healey has pledged to use Wednesday's budget to harness the power of artificial intelligence to bolster Britain's security and prosperity against the risks in the accelerating global technology arms race. As he prepares for his debut budget, the chancellor said that Andy Burnham's government would commit hundreds of millions of pounds to develop a "distinctively British" approach to AI that would capitalise on the benefits of the frontier technology. At a fork in the road as AI developments pose both existential threats and transformative economic potential, Healey said he would be making the biggest ever investment to guard against cyber risks and the disruptive potential of the technology.

UK economy grew 0.1% in August ahead of Healey's first Budget The UK's economy grew slightly in August, according to the last set of official figures before John Healey's Budget. With the chancellor planning to set out his tax and spending plans later this month, the Office for National Statistics (ONS) said the economy expanded by 0.1%, which was better than analysts had expected. The small increase follows growth of 0.4% in July, as well as positive upgrades to the outlook for Britain's economy from global watchdog the International Monetary Fund (IMF). But Healey still faces a challenge to to deliver a balanced Budget without turning to more borrowing. Britain's economy was boosted in August by an increase in production, which includes manufacturing, oil and gas extraction and energy supply.

Today's inflation figures underscore that the economy is the biggest challenge facing Andy Burnham. It is only 42 days until John Healey's first Budget, and there is increasingly apparent concern at all levels of the government and Labour Party about how that Budget can - or, as it may prove, cannot - substantiate Burnham's rhetoric about offering the biggest change in British politics in 40 years. Much of the tricky economic environment, yes, is driven by global factors including the persistence, and to some degree worsening, of the conflicts in the Middle East and Ukraine. And the AI boom pushing up borrowing costs is another issue affecting many countries. But there are clearly domestic factors particular to Britain, and on that front it was very striking to hear the former Bank of England chief economist Andy Haldane telling LBC on Tuesday that without signs of cuts to public spending the markets now suspect that this is a traditional tax and spend socialist government with better TikTok videos.

The UK government is in discussions about joining a global investment bank, aimed at raising more money for defence spending. Chancellor John Healey is considering a bid to join the Defence, Security and Resilience Bank (DSRB), not long after his predecessor Rachel Reeves rejected the idea. Canada has been leading efforts to establish the bank, which supporters say would enable governments to borrow at lower costs to increase military spending. Treasury officials stressed that no decision has been made. A government spokesperson said it was fully committed to working alongside our international partners to scale defence industrial capacity.

Faisal Islam: Chancellor's attempts to boost vibes may limit tax rises The chancellor may have thought about shifting the venue of his first major speech this morning. It was an absolute and total coincidence that he chose to make it in the Coventry Manufacturing and Technology Centre (MTC), just a few minute's drive from the city's totemic HQ of Jaguar Land Rover (JLR). In the event, no one was pulling punches. The 4,000 office-based job losses at JLR were confirmed as John Healey answered questions a few miles away. Healey chose to lean into it as an example of the global turbulence against which the UK needs more resilience. The difference between this chancellor and his predecessor was he also feels that stressing fiscal discipline should instil confidence in consumers, businesses and investors, and not sap it away amid rolling fears of tax hikes.