UK Budget Offers £2.6B Energy Relief, Tax Hikes on Banks to Offset £65B Borrowing Surge

British finance minister John Healey announced a £100 ($133) payment to roughly 20 million households in lower-valued homes and an extension of the fuel duty freeze to shield consumers from "global economic storms," in the first budget of Prime Minister Andy Burnham's government. The £2.6 billion energy package and £1.4 billion fuel duty extension are funded partly by higher taxes on banks, gambling and saver income, plus tighter VAT rules for online marketplaces including Amazon and eBay. The temporary bank surcharge increase is estimated to yield £1.5 billion. The Office for Budget Responsibility said higher inflation and borrowing costs will add £65 billion to borrowing over five years, with GDP growth now forecast at 1.0% in 2027, down from March's 1.6% projection. Inflation is seen peaking at 3.8% in early 2027. The OBR warned living standards will fall near term. Thirty-year gilt yields fell as much as 5 basis points to 5.691%, their lowest in over a month, as markets welcomed the time-limited giveaways and offsetting bank tax.