Healey’s first Budget on 28 October: higher bank taxes, a first-home loan scheme and a £100m AI biosecurity lab
The chancellor is expected to defer hard choices on defence while funding a short-term spending package, and a former Bank of England chief economist warns of a ‘mañana budget’.
Chancellor John Healey will set out his plans for UK taxes on 28 October3.
His first Budget is expected to push hard choices to another day: decisions on defence will be deferred, and he will use higher taxes on banks to fund a populist short-term spending package1.
The chancellor will unveil AI spending aimed at shoring up the UK’s defences in Wednesday’s Budget, including £100m for what the government calls a ‘world first’ AI Biosecurity Lab2.
The national lab will come with a £100m budget and credits from OpenAI and Anthropic7.
A Your First Home scheme will offer government-backed loans for people buying new-builds in England, with an earnings limit of up to £140K4.
Get AiM Weekly, free.
The warning
Andy Haldane, a former chief economist at the Bank of England, said he feared the government would deliver a ‘mañana budget’ that deferred the tough decisions5.
Haldane warned that the prime minister risks a Truss-style crisis if he dodges tough choices5.
Haldane is an ally of Burnham, whose biggest test has been described as lying between quick wins and big dreams8.
The backdrop is inflation of 3.5 per cent in the 12 months to September, up from 3.1 per cent6.
Why it matters to investors
Higher taxes on banks put lenders directly in the path of the Budget, since they are the named source of funding for the spending package1.
Deferring defence choices leaves an open question over future borrowing, which is the risk Haldane links to a Truss-style market reaction1,5.
Rising inflation also limits the room for manoeuvre, because the Bank of England sets its base rate to control it6.
The housing loans and AI lab show where the government is choosing to spend: on new-build demand in England and on AI security2,4.
Because the Your First Home loans are government-backed, the state takes on part of the risk of new-build purchases in England4.
Haldane’s warning is that deferring tough choices, rather than any single measure, is the main risk to the Budget’s credibility5.
What to watch
The first detail is the size of the bank tax that funds the spending package1.
The second is how the Budget treats defence spending that is being deferred1.
The third is the reaction in gilts, given the warning that dodging tough choices could bring a Truss-style crisis5,6.
Sources
- Healey’s First Budget to Push Hard UK Choices to Another Day - Bloomberg, bloomberg.com (2026-10-24)
- UK to invest £100m in ‘world first’ AI Biosecurity Lab, bbc.co.uk (2026-10-24)
- What is the Budget and what could be in it?, bbc.co.uk (2026-10-23)
- Earnings limit of up to £140K for first-time buyers loan scheme, bbc.co.uk (2026-10-23)
- Andy Haldane: PM risks Truss-style crisis if he dodges tough choices - The Times, thetimes.com (2026-10-24)
- Forget budget theatrics, here’s what will really affect your money - The Times, thetimes.com (2026-10-24)
- UK Government Establishes National AI Biosecurity Lab With £100m Budget, OpenAI And ..., newscord.org (2026-10-24)
- Between quick wins and big dreams lies Burnham’s biggest test - BBC, bbc.com (2026-10-24)
Assembled by Edwin, my AI assistant powered by Claude, from the public excerpts of the outlets numbered above. No human wrote or checked it before publication, so read the sources before you act on it.
This story passed the checks every published story must pass: 8 sources from 5 outlets, at least two outlets, at least five citations to its sources, a Tier 1 or 2 source cited, every substantive figure found in a cited source, no repeat of a recent headline.