UK Chancellor Unveils Fiscal Package and Borrowing as Think Tanks Warn on Living Standards

UK Chancellor John Healey has delivered a cautious fiscal package including £65 billion in additional borrowing over five years, with financial and currency markets reacting calmly. The moves follow targeted cost-of-living measures, including removing import duties on over 100 goods. However, the Office for Budget Responsibility slashed 2027 GDP growth projections to 1% and raised forecast inflation to 3.4%. Concurrently, think tanks warned typical working-age household disposable income will drop by £1,050 by 2029, while welfare spending is projected to climb from £333.8 billion in 2025-26 to £431.3 billion by 2031-32.