Budget 2025 (HTML)

Return to an order of the House of Commons dated 26 November 2025 Ordered by the House of Commons to be printed 26 November 2025 HC number 1492 © Crown Copyright 2025 ISBN 978-1-5286-6090-7 1. Executive summary 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. 1.1 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 The welfare system is not working as it should, forcing too many sick people out of work and on to benefits. Total spending on welfare grew by nearly a percentage point, as a share of GDP, over the last Parliament. The government is reforming the welfare system to tackle its failings. To stop people being written off due to sickness, the government is: Rebalancing Universal Credit (UC) rates so that it doesn’t pay to be off sick rather than work. Tackling youth unemployment with a guaranteed job opportunity while commissioning Alan Milburn to conduct an independent report on young people, health and work. Working with employers to support those who get sick to stay in work. The government is also: Announcing new reforms to the tax breaks available to Motability and other qualifying schemes, raising over £1 billion over the next five years. Putting an end to those living abroad being able to buy cheap access to a UK State Pension. Undertaking the Timms review of Personal Independence Payment. Taking further action on fraud and error, saving £1.3 billion in 2030-31. The welfare system is also failing children. The government is therefore scrapping the two child limit in Universal Credit (UC) to lift 450,000 children out of poverty. Growing up in poverty means that an individual is more likely to end up out of education, employment or training, with children growing up in poorer households earning around 25% less at age 30 than their peers. Poverty not only damages individual futures but the long-term health of the economy. Lifting the two child limit is the quickest and most cost-effective way to reduce child poverty over this Parliament. This measure is funded by policies in this Budget, including reforming Motability tax reliefs and clamping down on fraud and error in the tax and benefits systems, including by increasing the number of face to face health assessments. 1.2 Protecting and strengthening the NHS and other public services while ensuring public money is well spent The government has prioritised improving public services, including investing an additional £50 billion in 2029-30 relative to the Spring Budget 2024 plans, and continue to invest an additional £120 billion in capital expenditure, consistent with the fiscal framework set at Autumn Budget 2024. As a result, the government is maintaining public investment at the highest sustained level in four decades at the Budget. Every penny of public money must be spent wisely, and the state must play its part by becoming more productive. So, at this Budget, the government is introducing an additional efficiency and savings target for all departments to meet at the next spending review, resulting in £2.9 billion of savings in 2028-29, rising to £4.9 billion by 2030-31. These efficiencies and savings include: Cutting the cost of politics: Abolishing Police and Crime Commissioners and reducing councillor numbers by around 5,000, saving over £250 million over five years. Reclaiming £74 million from asylum accommodation suppliers; and the government has delivered nearly £400 million of Covid fraud benefits to-date and will relentlessly pursue more cases through the new Public Sector Fraud Enforcement Unit. Further action to close the tax gap by pursuing those who try to bend or break the rules, collecting more unpaid taxes and modernising the tax system. This brings the total additional revenue raised by closing the tax gap this Parliament to £10 billion in 2029-30. 1.3 Making the tax system fairer and fit for the 21st century The government is making the tax system fairer and fit for the 21st century. Everyone is being asked to contribute, but the government is keeping that contribution as low as possible by pursuing fair reforms that are long overdue. Contribution: The government is maintaining personal tax thresholds and the National Insurance contributions (NICs) secondary threshold from 2028 until 2031 and the Plan 2 student loan repayment threshold from 2027-28 until 2029-30. Fairness: One reason employees pay more tax is because Britain has not historically done enough to make sure assets – and income from assets – contribute fairly. Building on last year’s changes to Capital Gains Tax, inheritance tax, VAT on private school fees and reform of the non-domicile regime, this Budget continues to sustainably raise further revenue from sources of wealth: The government is raising taxes on property, dividend and savings income, reflecting the fact that income from those sources faces no equivalent of National Insurance that employees pay. Existing allowances will continue to protect those with low to middle amounts of such income. The average Band D family home pays more in Council Tax than a £10 million property in Westminster, so this government is introducing a High Value Council Tax Surcharge on homes worth over £2 million. Some tax reliefs that disproportionately benefit the wealthy and higher earners have significantly risen in cost in recent years. The government is therefore reforming them: By capping NICs relief on salary sacrifice into pension schemes to the first £2,000 of pension contributions per person from 2029. The costs of this relief were set to increase from £2.8 billion in 2016-17 to £8 billion by 2030-31 without reform, and use of these arrangements has disproportionately benefitted higher earners. The cap shields 74% of basic rate taxpayers using salary sacrifice, and the government continues to support pension saving through auto-enrolment and tax relief, worth over £70 billion per year. The government is restricting Employee Ownership Trust Capital Gains Tax relief from 100% to 50%. This is because this scheme is on course to cost £2 billion, 20 times beyond the original costings when the scheme was announced in 2013. Modernisation: The government is making the tax system fit for the 21st century: All cars contribute to wear and tear on the roads, so it is only right that motoring taxes cover electric cars via a modest self-reported per-mile levy. Raising taxes on online gambling – which has grown substantially over the years, alongside gambling harms – while protecting face-to-face gambling, from bingo halls to horse racing. Preventing ride-sharing taxi apps from exploiting an administrative scheme intended for tour operators in order to pay a lower rate of VAT than others. With the rapid rise in cross-border e-commerce, some online retailers are being placed at an unfair advantage due to the UK’s customs duty relief for low-value imports. This Budget is removing that relief to support Britain’s businesses and high streets. 1.4 Taking decisive action to cut the cost of living and bring down inflation Families across the UK are feeling the squeeze of still too high inflation. The Budget delivers a set of measures to remove around £150 of costs on average from household energy bills from April next year. Energy costs will be reduced by the ending of the Energy Company Obligation, which is currently funded through bills, and through the government funding 75% of the domestic cost of the legacy Renewables Obligation for three years. This is on top of extending the £150 Warm Home Discount to a further 3 million of the poorest households. And the Budget goes further by: Introducing a one-year freeze of regulated rail fares – for the first time in 30 years – saving commuters on the more expensive routes more than £300 per year. Implementing a one-year freeze on prescription charges, keeping fees at £9.90 for a single charge. Extending the 5p fuel duty cut until the end of August 2026 with rates then gradually returning to March 2022 levels by March 2027. The planned increase in line with inflation for 2026-27 will also be cancelled. Alongside the introduction of Fuel Finder, these measures are expected to save families £89 next year compared to previous plans. Increasing the National Living Wage for the lowest paid to £12.71 per hour in April 2026. Supporting the incomes of over 12 million pensioners through a commitment to the Triple Lock for the duration of this parliament. In April 2026, the State Pension will be uprated by 4.8%, so pensioners will receive up to an additional £575 a year. The Budget package directly cuts inflation by 0.4 percentage points next year. This is the biggest near-term reduction in inflation due to government policy ever forecast by the OBR at a single fiscal event, outside of a crisis. This Budget takes fair and necessary choices – but those choices are for a purpose: building a stronger, fairer country, where living standards rise, child poverty falls and public services are rebuilt in every corner of Britain. 2. Economic and fiscal outlook UK Gross Domestic Product (GDP) growth in 2025 has outperformed the Office for Budget Responsibility’s (OBR) March forecast. [footnote 1] , [footnote 2] Alongside this, living standards have risen: real household disposable income (RHDI) has increased after having fallen during the previous Parliament; real wages rose more in the past 16 months than they did between 2010 and 2020. [footnote 3] , [footnote 4] GDP per capita has grown by 1.0% since the start of the Parliament (Q2 2024). [footnote 5] This compares to a decline of 0.2% across the previous Parliament. [footnote 6] Despite this stronger performance, the UK faces longstanding economic challenges. Productivity growth has been persistently weak, caused by historic under-investment and a series of economic shocks. The OBR has revised down its forecast for underlying medium-term productivity growth after it has consistently undershot its forecast. On its own, the lower forecast for productivity growth would have lowered revenues by around £16 billion in 2029-30. [footnote 7] The government has set out an economic and fiscal plan underpinned by the principles of stability, investment and reform that will enable the conditions for sustainable growth and reduce the cost of living. The Budget continues to deliver on this strategy. The government is meeting the non-negotiable fiscal rules, more than doubling the buffer to the stability rule to £21.7 billion and is cutting debt: net financial debt (public sector net financial liabilities) is forecast to fall as a share of GDP in 2029-30 and 2030-31, and is lower by the end of the forecast than in 2025-26. From 2025 to 2030, the UK is reducing government borrowing more than any other G7 country. [footnote 8] To support the economy with greater policy certainty, the government is delivering on its commitment to hold one fiscal event a year, by legislating to ensure that the fiscal rules are only assessed at future Budgets. At the same time, the government is continuing to drive sustainably higher growth and is tackling the cost of living. The Budget has protected an increase of over £120 billion in departmental capital spending, compared with previous plans, and taken measures that are expected to reduce Consumer Prices Index (CPI) inflation by 0.4 percentage points in 2026-27. [footnote 9] This is the biggest near-term reduction in inflation due to government policy ever forecast by the OBR at a single fiscal event, outside of a crisis. [footnote 10] 2.1 Economic and fiscal context Economic context UK GDP has grown by 1.0% in 2025 to date with strong growth in Q1 as firms and households brought forward activity, whilst recent growth has been slower. Household consumption grew for the fifth consecutive quarter, rising by 0.2% in Q3, and across 2025 business investment has grown by 2.7% in real terms, outperforming the OBR’s March forecast. Growth in 2025 has been primarily driven by services output, which in Q3 was 1.6% higher compared with the same quarter a year ago. [footnote 11] CPI inflation peaked at over 11% in October 2022, following global supply chain disruption and a sharp rise in energy prices caused by Russia’s illegal invasion of Ukraine. [footnote 12] High inflation has weighed on living standards and pushed up government borrowing costs. CPI inflation rose through the second half of 2024 and first half of 2025, in part due to past large falls in the energy price cap dropping out of the annual comparison, one-off price rises, and higher food price inflation. Inflation has now started to fall, coming down to 3.6% in October from 3.8% in September (Chart 1.1). Chart 1.1: Contribution to Consumer Prices Index (CPI) inflation Source: Office for National Statistics. Hiring has continued to ease through 2025. Demand for labour has softened, with vacancies falling 99,000 in the year to October. [footnote 13] The number of payrolled employees is down over the same period, with the fall due to lower inflows as opposed to higher outflows. [footnote 14] With slower hiring, unemployment has risen to 5.0% in Q3 2025. [footnote 15] The rise in unemployment has been concentrated among young people, with the youth (16-24 year olds) unemployment rate standing at 15.3% in the same period. [footnote 16] The rate of young people not in education, employment, or training (NEET) has risen over the last six years and is now 12.7% in Q3 2025, up 1.2 percentage points from the same period in 2019. [footnote 17] , [footnote 18] Against this backdrop, nominal pay growth has eased, with private sector regular pay growth falling to 4.2% in Q3. [footnote 19] In real terms, wages have continued to rise and have now been increasing for over two years. [footnote 20] The global macroeconomic environment remains volatile and uncertain. The International Monetary Fund (IMF) expects global growth to slow slightly from 3.3% in 2024 to 3.2% in 2025 and 3.1% in 2026 – cumulatively 0.2 percentage points below its October 2024 projections. [footnote 21] Trade policy uncertainty remains elevated despite falling from its April 2025 peak, deterring business investment and dampening growth. The UK faces risks from geopolitical tensions, including Russia’s illegal war in Ukraine, global trade disruption, and increasing global fiscal pressures. The OBR notes “significant uncertainty” around global trade policy developments as a risk to the UK’s economic outlook. Despite some volatility in April, global and UK equities have risen over 2025 in line with generally positive risk sentiment. [footnote 22] Structural trends Weak productivity growth has dragged on living standards over the past 15 years. Prior to the COVID-19 pandemic, between 2010 and 2019, annual productivity growth averaged 0.6%, down by around 1.5 percentage points from the decade prior to the Global Financial Crisis (GFC) (1998-2007) (Chart 1.2). [footnote 23] If productivity growth had continued at the pre-GFC rate, then GDP per capita could have been around £15,000 higher in 2024. [footnote 24] Instead, productivity growth slowed significantly. Whilst this slowdown has also been experienced by G7 peers – annual productivity growth in France, Germany and the US slowed from 1.6%, 1.4% and 2.3% in the decade prior to the GFC, to 0.9%, 1.2% and 0.9% in the decade after, respectively – the UK saw the largest fall between these periods. [footnote 25] Since the pandemic, the US has seen a partial recovery in its productivity growth, demonstrating the ability of advanced economies’ productivity growth to pick up. Chart 1.2: Pre-GFC trend and outturn productivity growth Source: HMT Calculations and Office for National Statistics. In the UK, the decline in trend productivity growth following the GFC has been largely driven by under-investment, compounded by a series of economic shocks including recent trade disruption, the effect of Russia’s illegal invasion of Ukraine on energy prices, the COVID-19 pandemic and leaving the EU. [footnote 26] Tackling under-investment is key to sustainably raising growth and living standards. Recent data has shown positive signs; whole-economy investment has risen by 4.2% in real terms since the start of the year, outperforming the OBR’s March forecast for a decline of 0.1%. [footnote 27] Over the same period, business investment has increased by 2.7%, above the OBR’s March forecast for growth of 1.1%. [footnote 28] Box 1.A: Changes to the OBR’s productivity forecast The OBR has revised down its forecast for medium-term productivity growth, measured as output per hour, by 0.3 percentage points to 1.0% at the end of the OBR’s five-year forecast period. This revision has brought the OBR’s productivity forecast in line with the Bank of England’s forecast and those of other external forecasters. [footnote 29] The UK’s productivity challenge is a longstanding one. The OBR has stated the revision was “not prompted by any particular government policy decisions” and was based on an assessment of the persistence of the UK’s slowdown since the GFC. The OBR expects that productivity growth will be lower than it previously assumed, but still higher than average productivity growth in the post-GFC period. The outlook for productivity affects living standards and the public finances. The revision to productivity growth in isolation has lowered tax revenues by around £16 billion in 2029-30 compared to the OBR’s March 2025 forecast. The government is already taking ambitious action to boost growth: protecting over £120 billion additional departmental capital spending over the Parliament, compared to previous plans; reforming the planning system to unlock building; and implementing the 10-year Infrastructure Strategy and Industrial Strategy. [footnote 30] The government is strengthening ties and resetting the relationship with the EU, and has secured trade deals with India and the US. Most recently productivity growth has started to pick up. In the year to Q3 2025, productivity growth was 1.1%, up from -0.6% in the year to Q2 2024. Estimates of productivity incorporating Pay As You Earn Real Time Information suggest that, in the year to Q3 2025, productivity growth was 3.1%, up from -1.1% in the year to Q2 2024 – its fastest rate, outside the pandemic, in the last decade. [footnote 31] Fiscal context Net financial debt as a share of GDP remains close to its highest recorded level, reached in the COVID-19 pandemic. [footnote 32] Public sector net borrowing (PSNB) has remained elevated at around 5% of GDP since the COVID-19 pandemic, resulting in borrowing of around £150 billion in 2024-25. [footnote 33] UK borrowing as a share of GDP is the third highest in the G7. [footnote 34] If borrowing remained elevated at 5% of GDP across the forecast, this would mean a cumulatively £22.1 billion higher debt interest bill than the OBR’s forecast. [footnote 35] The government’s fiscal strategy is to reduce borrowing and debt, to avoid spending ever more taxpayer money on debt interest. Debt servicing costs were over £100 billion in 2023-24 and 2024-25. [footnote 36] £1 in every £10 of public sector spending goes on servicing previously borrowed money, instead of supporting public services or investment. [footnote 37] This is roughly equivalent to four times the amount currently spent on nurses employed in the hospital and community health sector. [footnote 38] The UK has the highest borrowing costs of any G7 country. If UK yields were instead at the average of those of G7 peers, debt interest costs would be £60 billion lower across the forecast horizon. [footnote 39] 2.2 Macroeconomic and fiscal strategy Economic growth is the central mission of the government. The government is making responsible choices to strengthen the foundations of the UK’s economy in order to raise living standards, underpinned by the principles of stability, investment and reform. Stability consists of low and stable inflation, sustainable public finances and predictable and consistent policy decisions. Securing stability Low and stable inflation reduces uncertainty for consumers and businesses, supporting them to make long-term planning and investment decisions and providing the confidence to increase consumption. The independent Monetary Policy Committee (MPC) of the Bank of England is responsible for bringing inflation to target. The government has published the remit for the MPC alongside the Budget to reaffirm that the Bank of England’s price stability objective is defined as 2% CPI inflation, which applies at all times. In addition, the government is taking action to bear down on prices to support households with the cost of living, with measures on energy bills, transport costs and fuel duty. Taken together, the OBR’s forecast shows government policy will reduce CPI inflation by 0.4 percentage points in 2026-27, supporting the Bank of England to get inflation back to target (Chart 1.3). Chart 1.3: Effect of policy measures on annual CPI inflation Sound public finances underpin macroeconomic stability. The OBR forecast shows the government is reducing borrowing as a share of GDP in every year of the forecast to support sustainable growth, low inflation and low interest rates. The Bank of England has cut Bank Rate five times this Parliament, which has translated to a saving of £1,200 a year for someone taking out a representative new two-year fixed rate mortgage in September 2025 compared to June 2024. [footnote 40] Box 1.B: Fiscal stance Fiscal policy influences growth and inflation by adding or withdrawing demand from the economy. The fiscal stance, measured by the primary deficit, assesses the effect of taxation and public sector expenditure on the economy by removing interest costs from borrowing as they are not a meaningful indicator of how fiscal policy affects the economy. The primary deficit is forecast to fall by 0.7% of GDP in the current financial year, the first material reduction since the withdrawal of COVID-19 pandemic support. The primary deficit falls by 1.4 percentage points between 2025-26 and 2027-28, and moves into surplus, which would be the first primary surplus since 2001‑02. [footnote 41] By 2030-31, the OBR forecasts a 1.4% of GDP primary surplus, driven by both higher tax revenue – accounting for around two thirds of the consolidation – and lower spending – accounting for the remainder. [footnote 42] The UK is set to consolidate more than any other G7 country from 2025 to 2030. [footnote 43] This consistent, steady reduction in the primary deficit is the most effective way for fiscal policy to reduce inflationary pressures, supporting the actions of the MPC to return inflation sustainably to target. The cyclically-adjusted primary deficit (CAPD) controls for the impact of the economic cycle and is a widely accepted measure of discretionary fiscal support. Across the forecast, the CAPD is expected to fall consistently and remains at a lower level than the primary deficit until 2028-29. This reflects the government taking the necessary decisions to bring the deficit down, at a pace that is well matched to the strength of activity and allowing monetary policy to adjust. Chart 1.4: Fiscal stance Source: Office for National Statistics and Office for Budget Responsibility. The government is meeting its non-negotiable fiscal rules. At the Budget, the fiscal rules target the fourth year of the forecast. Gradually bringing the time horizon for the fiscal rules forward improves on previous fiscal rules which targeted the fifth rolling year of the forecast and enabled continual delays to fiscal consolidation. To further support stability and certainty for businesses and households, the Budget is going further to increase the buffer against these rules, in line with IMF recommendations. [footnote 44] Action taken at the Budget means that the public finances are protected by a larger buffer of £21.7 billion against the stability rule. This buffer is greater than the average revision to the OBR’s forecast between fiscal events in the fourth year, helping to protect tax and spending plans from changes in the economy. The Budget is strengthening the fiscal framework to deliver on the government’s commitment to hold one major fiscal event per year, supporting the economy with greater policy certainty. Responding to recommendations made by the IMF, the government will legislate to ensure the OBR assesses performance against the fiscal rules once a year at the Budget. [footnote 45] The OBR will continue to publish a second five-year forecast in the spring, providing an interim update on the economy and public finances, and to inform the Debt Management Office’s (DMO) financing remit. The government will not normally respond with fiscal policy, unless there is a significant change to the economic outlook that requires a response. To ensure the public finances are more resilient to economic shocks, the government is setting out a strategy at the Budget for managing its implicit liabilities. [footnote 46] Implicit liabilities are private sector liabilities which government may be compelled to meet during crisis events. This strategy is a proactive approach to managing implicit liabilities, providing a toolkit to mitigate costs. This is supported by a £15 million fund, which will be allocated to priority projects to develop and implement policy options for mitigation, including pursuing legislative or regulatory changes where appropriate. Responsible decisions for the future The government is building a stronger economy both now and for future generations, improving living standards across all regions of the UK. The government is tackling historic under-investment to boost productivity and driving reforms to raise growth. Going for growth At Autumn Budget 2024, the government set fiscal rules which supported a necessary step change in investment by delivering over £120 billion of increased departmental capital spending, compared to previous plans. At Budget 2025 the government is protecting this investment. Tackling historic under-investment is critical to boosting productivity. Higher public investment increases the stock of capital in the economy, which in turn increases the level of capital per worker, productivity and potential output. Broadening the target measure of debt recognises that financial investments, such as those made by the National Wealth Fund, create value for the taxpayer as well as supporting growth. The government has provided its public financial institutions with £153 billion of capacity, including through the National Wealth Fund, which has deployed £3.8 billion in its first year and is expected to catalyse over £70 billion of private investment in high-growth sectors at the heart of the government’s industrial strategy. [footnote 47] The OBR has set out that policies announced by the government will increase the potential output of the UK economy. Decisions taken across this Parliament, including planning reform, planned increases in public investment, and trade deals struck with other countries, will raise output in the medium and longer term (Chart 1.5). The OBR estimates that the combined supply-side effects of policy announced across the Parliament will raise the level of GDP by over 0.6% after 10 years. [footnote 48] At Spring Statement 2025, the government also increased departmental capital budgets by a further £13 billion across the forecast period. [footnote 49] These benefits will continue to build after 2035; the OBR estimated that public investment will raise the level of GDP by 1.4% in the long run (over 50 years). Public investment could further crowd in additional private sector investment where additional public sector investment raises returns in the private sector and labour market. Chart 1.5: OBR-estimated supply side effects of policies announced this Parliament Source: Office for Budget Responsibility figures and HM Treasury calculations. Fiscal sustainability Alongside the Budget, the government is publishing a response to the OBR’s 2025 Fiscal risks and sustainability report, which sets out how the government is addressing long-term sustainability challenges. [footnote 50] The fiscal strategy to reduce borrowing will improve the sustainability of the public finances for future generations, as every additional £1 billion the government borrows to spend today means £150 million more spent on debt interest each year in 30 years’ time. [footnote 51] The government is taking responsible decisions to reform the tax system in order to support long-term fiscal sustainability. Decisions taken at the Budget help to strengthen the tax base, including: introducing eVED to respond to the long-term decline in fuel duty receipts as more people choose to switch to cleaner, greener electric cars; ensuring income from assets is taxed fairly by increasing taxes on property, dividends and savings to help to close the gap between tax paid on work and tax paid on income from assets; reforming existing tax reliefs such as changes to salary sacrifice arrangements for pension contributions; and introducing a new High Value Council Tax Surcharge. The government is taking action to improve the sustainability of public spending, including by: launching the third independent review of State Pension age and a new Pensions Commission to help build a strong, fair and sustainable pension system that is fit for the future; publishing the 10 Year Health Plan, which will help secure the financial sustainability of the NHS; reforming administration of the welfare system to reduce fraud and error, which will save £4.6 billion in 2030-31, due to actions at the Budget and the previous two fiscal events. [footnote 52] , [footnote 53] , [footnote 54] The government will also set out substantial plans for reform of special educational needs provision to deliver a sustainable system which – first and foremost – supports children and families effectively, through a Schools White Paper early in the new year. To further improve its management of the public sector balance sheet, the government has announced a Strategic Asset Review in support of a £1 billion asset efficiency target, and a value-for-money review of the maintenance of public sector assets, which will be conducted ahead of the next spending review in 2027. These programmes are the first applications of the new Balance Sheet Framework published at the Budget, which for the first time sets out a comprehensive approach to the management of public sector assets, liabilities and entities. [footnote 55] It will guide decisions on new transactions, use of private finance and disposal of assets, alongside ensuring existing assets are well managed. 2.3 Economic and fiscal outlook Economic outlook The government’s decisions in Budget 2025 will lower inflation, protect investment and provide greater stability, which will support the growth mission. An overview of the OBR’s economic forecast can be found in Table 1.1. Table 1.1: Overview of the OBR’s economic forecast (1,2) Outturn Forecast 2024 2025 2026 2027 2028 2029 2030 Gross domestic product (GDP) 1.1 1.5 1.4 1.5 1.5 1.5 1.5 GDP per capita 0.1 1.0 1.0 1.2 1.1 1.1 1.1 Potential output growth 1.6 1.8 1.3 1.3 1.3 1.5 1.5 Main components of GDP Household consumption (3) -0.2 0.9 1.2 1.5 1.6 1.8 1.7 General government consumption 3.4 2.0 2.2 1.8 1.3 1.2 1.7 Total fixed investment of which 1.8 2.2 1.3 3.1 2.5 1.5 1.4 Business investment 2.3 2.8 -0.4 0.6 0.9 1.2 1.4 General government investment 4.1 2.5 7.8 5.4 -0.2 -1.3 0.2 Private dwellings investment (4) -1.4 1.0 1.4 6.8 7.7 4.1 2.0 Change in inventories5 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Exports 0.7 3.3 0.4 0.3 0.5 0.8 0.9 Imports 2.6 3.7 0.2 1.3 1.3 1.1 1.1 Consumer Prices Index (CPI) inflation 2.5 3.5 2.5 2.0 2.0 2.0 2.0 Employment (millions) 33.6 34.2 34.3 34.6 34.9 35.1 35.4 Unemployment (% rate) 4.3 4.8 4.9 4.6 4.3 4.2 4.1 Productivity – output per hour 0.3 0.7 0.7 0.8 0.8 0.9 1.0 Real household disposable income (RHDI) per capita 3.1 1.0 0.2 0.3 0.3 0.3 0.4 1 All figures in this table are rounded to one decimal place. This is not intended to convey a degree of unwarranted accuracy. Components of GDP may not sum to total due to rounding and the statistical discrepancy. 2 Percentage change on a year earlier, unless otherwise stated. 3 Includes households and non-profit institutions serving households. 4 Includes transfer costs of non-produced assets. 5 Contribution to GDP growth, percentage points. Source: Office for Budget Responsibility and Office for National Statistics. The OBR forecasts the economy will grow by 1.5% in 2025, revised up from 1.0% in its March forecast. GDP growth is then forecast to slow slightly to 1.4% in 2026, before returning to 1.5% in subsequent years. Average GDP growth across 2026 to 2029 is now expected to be 1.5% compared with 1.6% in the OBR’s March forecast. The OBR expects the level of real GDP at the end of its forecast horizon to be broadly in line with its March forecast. This is because of upward revisions to the level of GDP in Blue Book 2025, and stronger-than-expected growth in 2025. [footnote 56] The key driver of lower real GDP growth over the forecast is the downgrade to medium-term productivity growth (Table 1.1). [footnote 57] The OBR expects total employment to increase from 34.2 million in 2025 to 35.4 million in 2030 – higher in every year of the forecast than previously expected. The OBR forecasts the unemployment rate to peak at 5% in the first half of 2026, before falling to 4.1% by the end of the forecast period. The OBR expects inflation to have peaked in Q3 2025, and that it will fall progressively to the Bank of England’s 2% target in Q1 2027. Actions taken by the government at the Budget will reduce inflation by a peak quarterly impact of 0.5 percentage points in Q2 2026 and 0.3 percentage points in 2026 on average. The OBR has increased its nominal GDP growth forecast over 2025 and 2026 but reduced its forecast for later years. The OBR expects the level of nominal GDP at the end of the forecast to be higher than March, due to the Blue Book 2025 revisions leaving the level of nominal GDP 1.4% higher in Q2 2025. Average nominal earnings growth is 0.8 percentage points higher in 2025 than in the OBR’s March forecast. The average nominal earnings growth forecast has also been revised up across 2026 and 2027, by 1.0 percentage point and 0.2 percentage points, respectively. Relative to the previous forecast, the OBR judges that the composition of nominal GDP growth will change towards labour income, with cumulative growth in labour income forecast to be 0.8 percentage points higher, and growth in corporate profits 6.5 percentage points lower, over the same period. The OBR forecasts that RHDI per capita and GDP per capita will rise by 2.9% and 5.3% respectively over this Parliament (Q3 2024 – Q2 2029). This would more than reverse the 1.8% fall in RHDI per capita seen in the previous Parliament. [footnote 58] Fiscal outlook Lower forecast productivity growth than at previous fiscal events has weakened the public finances by reducing forecast tax receipts. The OBR highlights that receipts are around £16 billion lower in 2029-30 than they would have been if productivity growth had remained the same as in the OBR’s March forecast (Table 1.2). At the same time, higher inflation, stronger wage growth and changes to the composition of GDP have increased receipts, whilst the OBR has revised up its forecast for local government net borrowing, and spending on welfare benefits and debt interest. Table 1.2: Changes in borrowing since March 2025 (£ billion) Forecast 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 March 2025 forecast 117.7 97.2 80.2 77.4 74.0 October 2025 forecast 138.3 112.1 98.5 86.9 67.9 67.2 Difference 20.6 14.9 18.3 9.5 -6.2 of which: Underlying forecast differences 16.8 11.0 7.1 8.9 5.5 of which: Productivity revision 0.0 2.3 6.3 11.0 15.6 Other forecast changes 16.8 8.8 0.8 -2.1 10.1 Direct effect of policy decisions (1) 3.7 5.9 9.9 -1.0 -14.8 -18.0 of which: Spending decisions 4.9 6.6 16.0 12.9 11.3 11.8 of which: Summer 2025 welfare policy changes 1.8 2.2 3.9 5.6 6.9 7.9 Removing the two-child limit 0.0 2.4 2.6 2.8 3.1 3.2 Other spending decisions 3.1 2.0 9.5 4.5 1.3 0.7 Tax decisions -1.3 -0.7 -6.1 -13.9 -26.1 -29.8 Other OBR spending judgements 0.0 0.0 0.0 -2.3 -2.2 -1.3 Indirect effects of policy decisions 0.2 -2.0 1.3 3.9 5.2 5.4 Note: This table uses the convention that a negative figure means a reduction in PSNB i.e. an increase in receipts or a reduction in spending will have a negative effect on PSNB. Figures may not sum due to rounding. 1 Differences between the direct impacts of the policy measures as set out in Table 4.1 of the Statement, and how the OBR incorporate these into their forecast are explained in the OBR’s EFO Table 3.1. Source: Office for Budget Responsibility. The Budget takes decisive action to secure the public finances whilst protecting the investment needed to drive growth in the medium term. PSNB as a share of GDP in 2025-26 is set to be the lowest for six years. [footnote 59] Borrowing is falling in every year of the forecast, from 4.5% of GDP in 2025-26 to 1.9% in 2030-31 (Table 1.3). The greatest fall in borrowing occurs in the first full year of the OBR’s forecast – PSNB is 1% lower in 2026-27 than in 2025-26. In 2029-30, borrowing is lower compared to the OBR’s March forecast. Table 1.3: Overview of the OBR’s fiscal forecast (% GDP) Forecast 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 Current budget deficit 1.7 0.9 0.1 -0.1 -0.6 -0.7 Public sector net investment 2.8 2.6 2.9 2.7 2.6 2.5 Public sector net borrowing 4.5 3.5 3.0 2.6 1.9 1.9 General government net borrowing (4) 5.0 4.1 3.6 3.2 2.6 2.4 Primary deficit 1.5 0.6 0.1 -0.5 -1.3 1.4 Cyclically adjusted primary deficit 1.1 0.3 -0.1 -0.6 -1.3 -1.4 Public sector net financial liabilities 83.1 83.3 83.6 83.7 83.0 82.2 Public sector net debt (1) 95.0 95.3 96.3 97.0 96.8 96.1 Public sector net debt ex Bank of England (1) 91.3 92.8 94.2 95.2 95.3 95.3 Public sector net worth (1,2,3) 70.4 70.2 70.3 70.3 69.5 68.0 General government gross debt (4) 100.8 102.2 103.2 104.0 104.1 103.9 1 Stock values at end of March; GDP centred on end of March. 2 IMF Government Finance Statistics Manual (GFSM) basis. 3 PSNW has been inverted to facilitate comparisons with the other stock metrics. 4 Calendar year basis. Source: Office for Budget Responsibility Chart 1.6: Public sector net borrowing and current budget deficit Source: Office for National Statistics and Office for Budget Responsibility. Performance against the fiscal rules The government is meeting its fiscal rules. The OBR forecasts that the current budget will move into surplus in 2028-29, meeting the stability rule a year early (Chart 1.7). The current budget surplus reaches £21.7 billion in 2029-30, which would be the largest current budget surplus for over 20 years, more than doubling the buffer to the stability rule. [footnote 60] Net financial debt falls as a share of GDP in 2029-30 and in 2030-31, meeting the investment rule in 2029-30 by a margin of £24.4 billion. Net financial debt is forecast to be lower as a share of GDP in 2030-31 than in 2025-26. The OBR assesses that the welfare cap will be met by £1.9 billion in 2029‑30. Financing The DMO net financing requirement for 2025-26 is forecast to be £314.7 billion. The remit for the DMO has been updated to reflect this, increasing by £5.6 billion. This will be financed through £303.7 billion of gilt sales (an increase of £4.6 billion), as well as £11 billion from the sale of Treasury bills used for debt management purposes (an increase of £1 billion). The net financing target of National Savings and Investments is also increased by £1 billion to £13 billion in 2025-26, within a range of plus or minus £4 billion. The government’s financing plans for 2025-26 are summarised in Annex A. The Central Government Net Cash Requirement (CGNCR) is £149.2 billion in 2025-26; the increase in CGNCR since the OBR’s March forecast is £14.1 billion lower than the increase in PSNB in 2025-26 and £10.7 billion lower than the increase in PSNB in 2026-27. [footnote 61] This is driven by several forecast changes which are neutral for or increase PSNB, but decrease or do not significantly impact CGNCR. This includes the Asset Purchase Facility (APF) indemnity payment from HM Treasury to the Bank of England, local authority net borrowing, and inflation-driven debt interest costs from index-linked gilts. The government is committed to maintaining as diversified an investor base as possible to enhance the resilience of the government’s financing programme. In keeping with this, HMT and the DMO will launch a consultation in January 2026 on expanding and deepening the Treasury bill market. In accordance with the debt management objective, any changes following the consultation will take into account an assessment of cost and risk, including implications for the government’s refinancing risk exposure. At end-September 2025, the average maturity of the total stock of debt was 13.7 years. [footnote 62] Year-to-year changes in the composition of issuance generally have a marginal impact on the average maturity of the debt stock, given the relative size of annual issuance compared with the stock. The average maturity remains consistently longer than the average across the G7. [footnote 63] The government has at the Budget published an updated Green Financing Framework, adding nuclear energy to the list of eligible expenditures for green financing (with some exclusions). [footnote 64] This reinforces the government’s firm conviction that nuclear energy is green and is a crucial part of making Britain a green energy superpower. The proceeds from sales of green gilts and Green Savings Bonds issued prior to 27 November 2025 will not be allocated to nuclear energy-related expenditures. A Second Party Opinion from S&P rates the new Framework as dark green, their highest rating, and an improvement on the Framework’s original rating in 2021. Balance sheet In addition to its fiscal rules, the government has committed to consider a wide range of metrics to inform a full assessment of the sustainability of the public finances and will seek to improve sustainability over time (Chart 1.7). [footnote 65] PSND as a share of GDP is forecast to peak in 2028-29 at 97.0% and then falls in 2029-30 and 2030-31, reaching 96.1% by the end of the forecast. Public sector net worth (PSNW) is expected to strengthen from -70.3% of GDP in 2028-29 to -69.5% in 2029‑30 and -68.0% in 2030-31. By the end of the forecast, the level of PSNW improves by over 2 percentage points compared to the 2025-26 level. Chart 1.7: Four measures of the public sector balance sheet 1 Government Finance Statistics Manual. Source: Office for National Statistics and Office for Budget Responsibility. Best practice in fiscal transparency means reporting on obligations that taxpayers may have to meet in the future, due to decisions today. Contingent liabilities are not included in net financial debt because they represent potential, rather than actual, obligations, often only being recognised at the point of crystallisation. The significant contingent liabilities that government has entered into since Spring Statement 2025 are set out in Table 1.4. Table 1.4: Significant contingent liabilities since March 2025 Department Reasonable worst-case (£ billion) Expected loss (£ billion) Expected income (£ billion) Department for Business and Trade 0.1 <0.1 <0.1 Department for Energy Security and Net Zero 53.8 0.5 0.5-2.4 Foreign, Commonwealth and Development Office 0.3 <0.1 0.0 HM Treasury <0.1 <0.1 <0.1 Ministry of Defence 2.2-2.5 <0.1 0.0 UK Export Finance 1.5 <0.1 <0.1 Total 58.3 0.6 0.6-2.5 Note: Expected loss represents a statistical estimate of potential losses, not a forecast of losses that will occur. Source: HM Treasury contingent liabilities database. Targeting net financial debt recognises the value of financial assets, enabling growth-enhancing investments. As committed to at Autumn Budget 2024, the Financial Transaction Control Framework sets guardrails for financial transactions, including transparency. Alongside the Budget, the government has published a report setting out the value, performance and risk of its £200 billion central government financial investments, including experimental analysis on the return on government’s investments. [footnote 66] The latest forecast for financial transactions is set out in Table 1.5. Table 1.5: OBR forecast of financial transactions, excluding Bank of England £ billion (current prices) 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 DEL net lending (1) 2.5 2.3 3.4 5.4 6.4 6.7 Student Loans (2) 8.9 15.1 9.7 9.9 10.0 9.8 National Wealth Fund 1.8 2.1 2.0 2.0 2.0 0.4 UK Export Finance 1.5 2.3 3.0 2.0 0.6 0.1 Other net lending 1.1 1.9 1.6 2.0 2.0 1.8 Total FT 15.9 23.7 19.7 21.3 21.1 18.9 1 DEL net lending includes an OBR forecast allowance for shortfall 2 The 2026/27 student loans figure captures the effect of the revaluation of the loan book caused by the freezing of the plan 2 repayment threshold Source: OBR Forecast. 3. Strong foundations 3.1 Cost of living The government is committed to improving living standards for everyone, in every part of the UK. The best headline measure of progress in living standards is real household disposable income (RHDI) per capita, which fell by 1.8% in the last Parliament, making it the only Parliament since records began in the 1950s in which living standards fell. [footnote 67] This fall has already been reversed; RHDI per capita was £800 higher in the first year of this Parliament, compared with the final year of the previous Parliament. [footnote 68] The Office for Budget Responsibility (OBR) forecasts growth to continue, with RHDI per capita projected to grow by 2.9% over this Parliament. [footnote 69] However, persistently high inflation has weighed on living standards. The government’s strategy for improving living standards is through growing the economy, which is the only way to sustainably increase wages, and through tackling inflation. Bearing down on prices High inflation erodes living standards and deters business investment. [footnote 70] Consumer Prices Index (CPI) inflation has been considerably lower than it was in 2022 when it breached 11%. [footnote 71] Nonetheless, it has remained elevated, with people across the UK feeling the squeeze. CPI inflation rose through the second half of 2024 and first half of 2025, in part due to past large falls in the energy price cap dropping out of the annual comparison, one-off price rises, and higher food price inflation. Inflation has now started to fall, coming down to 3.6% in October from 3.8% in September. In everyday terms, food prices increased over 25% between the start of 2022 and May 2024, with the UK experiencing nearly 15 years of typical food inflation during that period. [footnote 72] , [footnote 73] The Bank of England has overall responsibility for controlling inflation and expects inflation to fall to the 2% target. [footnote 74] The government is fully committed to tackling high inflation alongside the Bank through responsible fiscal strategy. Government policy at the Budget stabilises the public finances, strengthens the foundations for economic prosperity and boosts growth. Beyond this, the government is targeting inflation at its source, by bearing down on everyday expenses such as energy bills, transport and childcare costs to ease cost of living pressures. Taken together, the OBR’s forecast shows government policy will reduce CPI inflation by 0.4 percentage points next year. [footnote 75] This is the biggest near-term reduction in inflation due to government policy ever forecast by the OBR at a single fiscal event, outside of a crisis. [footnote 76] The government recognises the strain that high energy prices have placed on people, including the spike in wholesale gas prices after Russia’s illegal invasion of Ukraine. The Budget is delivering a package of measures to remove around £150 of costs on average from household energy bills across Great Britain from April 2026. [footnote 77] This will be delivered through the government funding 75% of the domestic cost of the legacy Renewables Obligation for the rest of this spending review period from 2026-27 to 2028-29 and ending the Energy Company Obligation which is currently funded through energy bills. These measures are forecast to directly reduce inflation by over 0.2 percentage points in 2026-27. [footnote 78] On top of reducing energy bills at the Budget, the government has also expanded the Warm Home Discount, which means that in total six million households will receive £150 off their energy bills this winter. [footnote 79] As well as taking costs off household energy bills, the government will provide an additional £1.5 billion capital investment to tackle fuel poverty through the Warm Homes Plan, in addition to the £13.2 billion of funding allocated at Spending Review 2025. The government is committed to doing more to reduce electricity costs for all households and improve the price of electricity relative to gas. The government will consider how to further target the savings announced in the Budget at electricity bills, including the savings derived from ending the Energy Company Obligation scheme. The government will set out how it intends to deliver this through the Warm Homes Plan. The government is focused on bringing down energy bills for households and businesses, while securing the necessary infrastructure investment to build a resilient energy system and reduce the UK’s dependence on imported fossil fuels. The government will subject any additional costs, including new levies, to enhanced scrutiny under a new framework to ensure they are affordable, represent value for money and do not impose unnecessary costs on households and businesses. Transport costs represent 14% of household spending. [footnote 80] To bear down on the cost of travelling by rail, the government is freezing all regulated rail fares in England for one year starting from March 2026, saving the average passenger £300 per year on the most expensive routes. [footnote 81] This is the first time the government has frozen regulated rail fares for a year in 30 years and means passengers will not see any changes to the price of season tickets, peak return fares for commuters and off-peak returns between major cities until March 2027. This builds on the government’s previous decision to extend the £3 bus cap to March 2027, covering 5,000 bus routes. [footnote 82] Pump prices are at their lowest levels since 2021, before Russia’s illegal invasion of Ukraine led to soaring prices and the introduction of a temporary 5p cut in fuel duty. [footnote 83] The government is extending the 5p fuel duty cut until the end of August 2026, with rates then gradually returning to March 2022 levels by March 2027. The planned increase in line with inflation for 2026-27 will also be cancelled. From Spring 2026, UK consumers will also be able to compare prices more easily through the Department for Energy Security and Net Zero’s open data Fuel Finder scheme, encouraging competitive pricing among retailers, with analysis suggesting households who own a car could save an average of around £40 a year. [footnote 84] Together, the actions the government is taking on fuel prices is set to save households with a car £89 next year compared with previous plans. [footnote 85] The Budget ensures that people can continue to access the medicines they need. That is why millions of people in England will see the cost of their prescriptions frozen for a year from April 2026, including keeping the single charge at £9.90, which will save patients on aggregate around £12 million. [footnote 86] The government has also announced that all women will be able to access the morning-after pill free of charge in pharmacies across England. This eliminates the postcode lottery of access to emergency contraception, so everyone can access the care they deserve. Although food price inflation has decreased, it is still too high at 4.9%. [footnote 87] Households are feeling the impact of this in their weekly shop, with those on lower incomes suffering the most. The government is acting decisively, negotiating an agri-food deal with the EU to make it easier for the UK to trade with its biggest partner. [footnote 88] Food businesses will save time and up to £200 per shipment when trading fresh food, helping to reduce pressure on prices. [footnote 89] The government also recently announced a Food Inflation Gateway to assess and monitor regulation which could add to food prices. [footnote 90] This will enable the government to coordinate and sequence changes and give food businesses a single line of sight so they can keep prices as low as possible. Resolving the historic under-investment in water infrastructure across England and Wales has led to bill increases over the past 12 months. [footnote 91] The government will publish its White Paper on water reform later this year, following Sir Jon Cunliffe’s independent review. These reforms will deliver better value for money and keep long-term costs down for customers. The government and Ofwat are also requiring water companies to improve support for customers, including doubling compensation when minimum standards are not met, and reforming the Water Sure scheme to better support low-income households with high water needs. Whilst private rental price inflation has fallen to 5.0% in October 2025 from a peak of 9.1% in March 2024, the government is committed to making renting easier and more affordable for 11 million private renters in England. [footnote 92] The Renters’ Rights Act 2025 will empower tenants to challenge unreasonable rent increases by ensuring tenants are able to appeal excessive above-market rents which are purely designed to force them out. It will also abolish ‘Section 21’ evictions, giving renters greater security and stability. Well-functioning, competitive markets deliver lower prices for consumers and support growth. The government has asked the independent Competition and Markets Authority (CMA) to conduct a study of private provision in the dentistry market. The government is also following up on recent work by the CMA, including by: Consulting later this year on a new regulatory framework for the veterinary market to increase competition for business and transparency for pet owners, providing more choice and bringing down costs. Introducing a price cap prohibiting the resale of a live events ticket for more than its original cost. Inclusive of all fees paid, the average ticket price paid by fans on the resale market could reduce by £37 in the UK. [footnote 93] Consulting to ensure families living on privately managed estates in England can hold their estate managers to account for costs they pay to maintain public