Dearbail Jordan
Senior business and economics reporter

As the OBR delivers a news conference on its latest forecasts, we're also trawling through 200 pages of its analysis and the forecaster has calculated that public sector net borrowing will be higher than it previously thought in March.

It now reckons borrowing will be 4.2% of the UK economy in 2026-27. It had expected it to equal 3.6% of gross domestic product. In fact, public sector net borrowing has been revised upwards for every year from now until 2031-22.

Dearbail Jordan
Senior business and economics reporter

Paying interest on government debt really does take a big chunk out of the government's coffers.

The OBR's Haskel says the Treasury is paying out £14bn on borrowing costs even before it spends on anything else.

That's why there is so much talk from the likes of Healey and Burnham about sticking to the fiscal rules.

If they can reduce how much interest the government pays, that money can be spent elsewhere.

Image source, OBR

Asked about disposable income, OBR economist David Miles says it's a "pretty grim picture".

"If you go back to just before Covid... where we are right now, some seven years later, is virtually no growth per person real household disposable income," he says.

That is "pretty unusual" in the history of the UK, he says, adding that it is to "quite a substantial extent" a reflection of increases to energy prices - which he describes as a "loss to the UK".

Over a 10-year period, starting just before Covid and up to 2029, he says there is "some growth" forecast in real household disposable income "from here on forward" - but "not in the very near term" due to energy prices.

Over that entire 10 years period, Miles says there may be a 1% increase in household disposable income, or "negligible growth every year for 10 years".

"It has been a dismal period in British economic history," he adds.

Haskel moves on to talk about the government's fiscal rules.

He says Healey's Budget will meet the government's two fiscal rules to a) cover day-to-day spending with tax revenue by the end of the parliament and b) net debt to be falling as a share of GDP over the same period.

But he says there is "lots of uncertainty" around these forecasts, with risks to the outlook including changes to energy prices, departmental spending and productivity growth.

Summarising the OBR's forecasts, Haskel says the fiscal background is "challenging" for various reasons, with the economic forecast for next year showing GDP lower and inflation higher.

However inflation is expected to fall and growth to recover in the medium-term, he adds, while fiscal rules will be met at the moment.

Image source, OBR

OBR chair Jonathan Haskel says government debt interest payments have gone up as a result of the increase in bank rates, explaining that debt interest is pushing up government spending by £14bn per year.

Other "stresses" on the economy, he says, include non-debt interest spending, including welfare payments.

The net effect of the chancellor's policies over the next five years is increased borrowing over the "first couple of years" and and a decrease "in the last couple" - "so they sort of somewhat net out," he adds.

Dearbail Jordan
Senior business and economics reporter

The Office for Budget Responsibility (OBR) chair Jonathan Haskel has begun his presentation on the forecaster's latest Economic and Fiscal Outlook - and it is sobering.

Back in 2006, UK debt as a percentage of GDP was 40%.

Now, it is nearly 100%.

Since March, when the OBR last published its forecasts, oil and gas prices have jumped substantially. He also points out that disposable income per household are not expected to rise as much as it previously thought.

The Office for Budget Responsibility is about to deliver a news conference following the Budget and the release of its latest analysis.

We'll bring you key lines from their forecast right here.

As a reminder, the OBR is the UK’s official public finances watchdog. It releases forecasts for the economy and public finances twice a year, alongside the Autumn Budget and Spring Statement.

Image source, House of Commons

Much of Liberal Democrat leader Ed Davey's criticism of the Budget stems from relations with the European Union (EU).

"The biggest single thing the government could do to fix our economy is to fix our trading relationship with Europe", Davey tells MPs in the Commons.

He says that until the government has "the courage" to do so, any Budget will just be "tinkering around the edges" as, in his view, it won't provide the growth needed by those in the UK.

Davey does, however, welcome PM Andy Burnham's open dialogue on relations with Europe, but he notes the issue is "just too urgent to wait until the next Parliament".

Growth, Davey adds, is well below what it used to be when the UK was part of the European Union.

The Lib Dem leader also points to income tax thresholds, saying they should rise to avoid a "stealth tax".

Chancellor's welfare predictions are highly uncertainpublished at 14:23 GMT

14:23 GMT

Dharshini David
Deputy economics editor

The chancellor said the changes to the triple lock formula for calculating pension rises will mean the welfare budget will save £15bn per year by 2040 - compared to the existing scheme.

But those predictions are highly uncertain - the figures could vary sharply for that estimate, depending on the path of the economy. The existing triple lock has cost several times as much as estimated.

Theo Leggett
International business correspondent

Image source, get

Earlier this afternoon, the chancellor confirmed that a 5p/litre discount on fuel duty - first introduced by the Conservative chancellor Rishi Sunak in 2022 - will continue until at least July.

The plan had been to phase out the discount early next year, with an increase of 3p per litre on 1 January and a further 2p on 1 March.

But the war in the Middle East has pushed fuel prices up dramatically.

The cost of filling a typical family car with diesel has gone up by around £30 since late February. A tankful of petrol costs about £23 more.

A 5p/litre increase would have added a further £2.75 to a fill-up. But that will no longer happen until the summer at least.

Some more now from the House of Commons, where MPs are reacting to John Healey's statement.

Treasury Select Committee Chair Meg Hillier welcomed large parts of the Budget, pointing to the previous Tory government for many of the shortcomings.

On Plan 2 student loans - and its absence from the Budget - Hillier says intergenerational fairness is a big strand of concerns among those in her committee.

But she says the plan was designed by Badenoch's government and it was "a ticking time-bomb left for this generation to pick up".

Hillier is "saddened" there weren't changes to the thresholds at which repayments are made, she hopes the chancellor can consider changes to ensure "that generation has one less burden upon them".

John Healey says today's budget has offered people "breathing space" with pressure on their finances. Here's how the key announcements affect you and your money:

Help with your energy bill: If you are living in a home in council tax bands A to D in England, you will receive a one-off £100 "Household Energy Payment" from January, funded by extra tax on banks.

Gas standing charges scrapped: Gas standing charges will be scrapped in England, Scotland and Wales, during 2027 "or as soon as possible after", the chancellor said. These fixed daily fees will be shifted onto the price of each unit of energy.

Fuel duty cut extended: The 5p "temporary" cut in fuel duty on petrol and diesel, introduced by Rishi Sunak in 2022, will be extended to July. It was scheduled to be phased out from January. It means drivers will still pay the levy at 52p per litre.

Minimum wage increased: Minimum wage rates will rise by 3.9% in April. However, these figures mean, this time around, there's no progress on Labour's manifesto promise to narrow the gap in minimum wages between older and younger workers.

State pension to rise: The triple lock policy means that the state pension will go up in line with average wage increases, at 3.9%.

• Read more about these policies in our news story.

Chancellor John Healey has now delivered this year's Budget, which MPs are currently debating in the Commons. You can watch that live at the top of the page.

As a reminder, though, there's more...

If you head to the watch & listen tab at the top of the page, we also have:

• An audio-only feed covering all the main events from BBC Sounds
• A Politics Live stream, featuring plenty of interviews, analysis and reaction
• On Youtube and TikTok, the BBC is delving into what the budget means for you - a panel of experts are talking all things housing, education and jobs
• And a little later on, there's a special programme answering your questions on the Budget at 17:30 GMT

Image source, UK Parliament

We've just heard Conservative leader Kemi Badenoch's first response to the Budget in the Commons. Here's a recap:

• Badenoch says she predicted last year that Reeves's Budget would be her last, saying Healey now has "a big job to do, cleaning up her mess"
• But she says the Budget is "not good enough, not strong enough, not bold enough"
• Next year the UK's tax burden will be "the highest in our country's history", she says and the UK remains "overspent, overborrowed, overtaxed and drowning in an out-of-control welfare system"
• Badenoch says there are "some things" in the Budget she welcomes - she thanks the chancellor for "breaking Labour's pledge on the minimum wage for young people" and welcomes his "U-turn on ISAs"
• For context: Labour's manifesto pledged to remove "discriminatory age bands" - today Healey announced a 3.9% rise in both the minimum wage for young people and for other workers on the national living wage, meaning the gap between the two has not changed
• Healey also confirmed he will not go ahead with the cut to the tax-free amount that people can put into a cash ISA - it will remain at £20,000 annually.
• Badenoch ends by saying "let's cut spending, cut the deficit, fund defence, cut people's taxes", and adds that is what her party would have done and that will be the choice at the next election

Badenoch goes on to describe her party's proposals as "tough love" to grow the economy.

She says the Tories would cut government spending by £70bn, "including "£36bn from welfare".

"We would use half of that money to cut the deficit, so Britain doesn't go bankrupt, and borrowing rates start to calm down," Badenoch says.

She goes on that defence spending would be a priority for a Tory government, "because keeping our country safe should be the first priority of any government".

Badenoch adds that getting public finances under control and living within our means "allows us to cut taxes, because that's what really gives people breathing space".

She lists off cuts the Tories would like to see, including scrapping the carbon tax, scrapping stamp duty, and abolishing inheritance tax on family homes.

That, she says, "is going to be the choice at the next election".

With that, she ends her response in the Commons.

Image source, House of Commons

The leader of the opposition tells Healey that graduate vacancies are down "almost 50%" this year after being the "the worst on record" in 2025.

She says she was hoping the chancellor would announce something relating to Plan 2 student loans, but says he "hasn't even done that".

Companies are reporting "140 applicants" chasing every job, Badenoch says, adding that unemployment has risen by a quarter of a million people since Labour got in.

Continuing on welfare, Badenoch says this is "not just about cutting the benefits bill" but adds that the welfare burden is "unfair" on those working hard to make ends meet.

"How do you think they feel when they hear working age welfare is costing every taxpayer £4,000 a year?"

Referencing Neet figures, she adds that one million people wake up "with nothing to do and nowhere to go" - suggesting Labour is creating a "lost generation".

We have to start showing people "some tough love", she tells the Commons.

How much does the UK spend on welfare? At its last forecast in the Spring, the Office for Budget Responsibility (OBR) estimated that the UK would spend £333bn (or 10.9% of GDP) on welfare this year.

This is forecast to reach £407 billion (11.2% of GDP) by 2030-31. Around half of welfare spending goes on pensioner benefits like the state pension.

Dearbail Jordan
Senior business and economics reporter

Inflation is expected to rise more than previously thought both in 2026 and in the coming years, according to the OBR.

That’s not really a shock. The last time the forecaster released its economic outlook in March, the US-Israel war with Iran was very much in its infancy.

Since then oil and gas prices have soared.

In today's freshly-published Economic and Fiscal Outlook, the OBR now expects inflation to reach 3.1% this year, ahead of a previous forecast for 2.3%.

That will rise to 3.4% in 2027 and will only return to the Bank of England's 2% target in 2030.

In March, it reckoned UK inflation would drift back down to 2% by next year and stay there.

Inflation "is eating away at our standard of living", says Badenoch.

She says that Labour "have looked after their people" and says there have been "plenty of pay rises for the unions" and that benefits will go up by inflation in April but private sector wages this year are below inflation.

"Those on benefits are getting an increase, while those going out to work will not," she says. "That is not fair."

She accuses Labour of being "addicted to spending other people's money" and "addicted to welfare".

She quips that "just because it's called Universal Credit" doesn't mean that "everyone in the universe" should be on benefits.

Image source, House of Commons

Badenoch keeps pressing on defence and says there are huge problems coming down the road.

She mentions Healey's previous comments he made after resigning as defence secretary earlier this year, describing him at the time as "a man of principle".

Badenoch says Healey should have set out a plan for reaching the commitment to spend 3% of GDP on defence by 2030 today, but says he has failed to do so.

What we have is a plan to have a plan, she adds.

She acknowledges that finding money for defence is difficult, "but it can be done".

She criticises today's Budget for relying on "more borrowing" to fund defence, and says the Conservatives have "found the savings" to get defence spending to 3%.