Chancellor John Healey will deliver the new government’s first Budget on 28 October, promising fiscal discipline while shifting “money and power out of Westminster”. The Budget will be a key test of whether Andy Burnham’s government can fund its early policy commitments and devolution agenda without undermining its borrowing rules or economic stability.

Potential costs include lower VAT on energy bills, reduced business rates for pubs, expanded technical education and £5 billion in defence spending announced in May. Economists warn that the Iran conflict could sustain inflation and high interest rates, leaving little scope for additional borrowing; suggested options include tax rises or cuts to welfare and pensions, despite Labour’s previous tax pledges and a £22 billion fiscal buffer left by Rachel Reeves.