As chancellor John Healey prepares his autumn budget, the article argues that the difficult economic conditions he faces largely stem from Donald Trump's policies and actions in the US. The US-Israel war on Iran has driven up oil and gas prices, fuelling inflation and a global bond market selloff, while Trump's tariffs are hitting British industry directly, exemplified by Jaguar Land Rover's announcement of 4,000 job cuts. His broader fiscal recklessness and pressure on the US Federal Reserve are also pushing up debt servicing costs worldwide, complicating Healey's task even as Britain's economy shows some underlying resilience.

Last week the oil price rose to $109 a barrel amid renewed market turmoil, sending the yield on 10-year UK gilts to almost 5.4%, the highest in nearly two decades. This is a particular concern because the Office for Budget Responsibility may base its budget forecast on recent market volatility, as it did ahead of Rachel Reeves's spring statement, potentially halving the £23.6bn of fiscal headroom estimated by Oxford Economics. With the budget due on 28 October, Healey faces added uncertainty from unpredictable factors including growth, inflation, employment and immigration levels, though he does have some scope to take domestic steps to bolster confidence.