Budget 2026: Healey faces ‘£11bn hole’ as growth slashed and inflation to rise higher

Britain’s fiscal watchdog has predicted that growth will slump and joblessness and inflation will surge in the coming years, as they warned John Healey will have to find billions of pounds more revenue between 2029 and 2032 in order to prevent cuts to government spending.  The Office for Budget Responsibility said the Chancellor would need to find an extra £11bn in his plans to stop day-to-day spending from falling by 2.6 per cent in real terms in the final three years of the fiscal forecast. Tom Josephs, one of three senior figures at the fiscal watchdog, told City AM in a press conference that there had been a “bit of a pattern” for the government to increase near-term borrowing and delay tax rises or spending slowdowns.  “Borrowing in the near term is a bit higher and that is both a consequence of higher energy prices, interest rates and the government’s policy choices,” he said. Household income squeeze and unemployment rise The OBR slashed the growth forecast for