The UK Budget descended into chaos on Wednesday after the Office for Budget Responsibility (OBR) accidentally published its assessment of Chancellor Rachel Reeves’ plans half an hour before her speech.
The unprecedented leak revealed proposed tax hikes and spending plans, leaving markets and the public scrambling to react.
According to the early release, measures include higher taxes on savings and pensions, as well as a new levy on electric and plug-in hybrid vehicles, confirming fears of a heavier financial burden for households.
Political Reaction: Critics Call It a Botched Budget
Opposition politicians were quick to respond.
Liberal Democrat leader Ed Davey branded it a “botched Budget,” claiming the Chancellor identified the nation’s economic problems but failed to provide solutions.
“Despite promises to cut the cost of living and grow the economy, the Government still refuses to fix our trade relationship with Europe and repair the £90bn Brexit black hole,” Davey said on social media.
Conservative figures also criticized Reeves, with Kemi Badenoch accusing her of “taking the public for fools” and turning the UK into a “shambolic laughing stock” for international investors.
Markets React: Borrowing Costs and Pound Movement
Financial markets initially panicked after the OBR leak, with UK government bonds, known as gilts, under pressure.
However, yields soon stabilized, and borrowing costs eased.
Yields on 30-year government bonds fell to 5.25 percent, seven basis points lower than the initial spike, while 10-year bond yields dropped to 4.46 percent.
The pound also strengthened following the temporary market turbulence.
Key Budget Measures: Fuel and Alcohol Duty
The Budget confirmed that fuel duty will rise from next summer, gradually returning to March 2022 levels by March 2027.
The inflation-linked increase scheduled for 2026/27 was temporarily suspended but is expected to resume afterward.
Notably, fuel duty has not increased since April 2010.
Alcohol duty is also set to rise with inflation, a move industry leaders have called a “sad day” for pubs, distillers, and hospitality businesses.
Miles Beale, CEO of the Wine and Spirit Trade Association, warned that repeated duty hikes, combined with other taxes like the glass tax, are pushing businesses into a “doom loop.”
OBR Issues Apology and Investigation
The OBR has apologized for its premature leak.
Chairman Richard Hughes confirmed an internal investigation and promised measures to prevent future mistakes.
Chancellor Reeves expressed confidence in Hughes, insisting he should not resign over the blunder.
“We have launched an investigation into the error and will report to the Treasury committee and the Chancellor,” Hughes said, stressing that action will be taken to avoid a repeat incident.
Economic Outlook: Stagnant Living Standards
The OBR downgraded its forecast for real household disposable income, predicting growth of just 0.25 percent per year.
Economic growth has also been cut for every year from 2026 onward, while cumulative government borrowing is now expected to be nearly £70 billion higher than previously forecast.
The Chancellor’s £26 billion in new taxes, combined with inflationary pressures, has created a gloomy outlook for living standards over the next five years.
Political Pressure Mounts on Reeves
With markets stabilizing but public anger rising, opposition figures continue to call for Reeves’ resignation.
Conservatives argue her position is untenable and warn that failure to act could damage the government’s credibility.
“The Prime Minister should grow a backbone and sack her,” Kemi Badenoch stated, emphasizing the political stakes surrounding the Budget fiasco.
How the Budget Affects Households
For ordinary citizens, the combination of tax hikes, duty increases, and inflation forecasts means tighter wallets in the coming years.
The Daily Mail has compiled a detailed guide explaining exactly how the Chancellor’s measures will impact households, from fuel costs to alcohol prices and pensions.
For many, the headline takeaway is clear: the Budget has sparked financial uncertainty and political turmoil, with consequences for both everyday life and the government’s standing.
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