Expert comment: 2025 Autumn Budget

An accidental Budget leak with very real consequences 

“Today’s accidental release of the Autumn Budget created a highly unusual situation. Much of what was revealed early has now been confirmed in full, including a Budget built around fiscal tightening, frozen thresholds and a series of tax rises that will reshape household finances, business decisions and the wider economy. Another £26bn worth of tax rises has now been confirmed despite the Chancellor’s message of reducing the cost of living.

"The accidental early release is embarrassing, but the policies themselves will shape UK households, businesses, and the wider economy for years to come. Despite promising to put more money into people’s pockets there is the effect of ‘giving with one hand, taking with the other.’”

Income tax: fiscal drag becomes the dominant tool 

“Tax thresholds will remain frozen, pulling millions into higher tax brackets until at least 2030/31. Around 750,000 people are expected to become higher-rate taxpayers, with close to one million new taxpayers in total. This is effectively a tax rise through ‘stealth’ as wages rise to keep up with inflation and more of that increase is taken by the Treasury. 

“It’s also important to mention the impact on graduates. Many student loan repayment thresholds have also been frozen. That means graduates start paying back their loans at lower real levels of income than before. It’s another form of fiscal drag that reduces take-home pay, especially for younger workers who are already feeling cost-of-living pressures.” 

Energy, consumption and everyday costs 

“For households, the overall effect is mixed. The cut in VAT on domestic electricity and gas from 5% to 0%, offering some short-term relief during winter, and freezes on rail fares and prescription charges should soften some of the pressure on everyday budgets. Pensioners will be brought closer to the basic rate threshold as the State Pension rises to £241.30 per week. This puts pressure on those who are already struggling with higher energy costs, which most likely pull basic rate pensioners into the 20% basic rate.” 

“Extending the 5p fuel duty cut until September 2026 is welcome news for motorists. It avoids an immediate jump in fuel costs and helps stabilise transport expenses for both households and businesses. Given how volatile fuel prices have been, this will be one of the more noticeable supports in daily life. But it’s still temporary, and we know fuel duty remains a key revenue source the Treasury will eventually revisit. Milkshakes, lattes and pre-packaged drinks added to the sugar tax, with producers expected to lower sugar content.” 

Businesses and the labour market 

“For businesses, the fuel duty extension helps with transport and logistics costs, particularly for smaller firms and delivery-based industries. But with labour costs rising, energy costs still elevated, and tax thresholds biting, business confidence may remain cautious. Businesses are also still feeling the effects of the employer NICs increases from last year’s budgets. Some firms may hold back on investment until the economic outlook feels more stable.” 

A notable absence: farming support 

“One striking omission in the Budget is any meaningful support for farmers, despite ongoing protests in Westminster. Agriculture is facing rising input costs, labour shortages, supply-chain pressures and falling margins, yet none of the policies appear to address these challenges. 

The broader message 

“Overall, the Budget signals a cautious approach: selective support on everyday costs, but within a broader strategy that continues to tighten the fiscal stance. It helps with some immediate pressures, but the combination of frozen tax and student loan thresholds means many households and workers will still feel the squeeze over the coming months.”