Autumn Budget 2026: Four things we think we know and one we definitely don’t

The usual pre-Budget rumour mill is in full swing – though perhaps not to the extent it was a year ago when then-Chancellor Rachel Reeves was floating the idea of raising income tax. A lot is unknown – here's 4 things we think we do know so far, and one that seems more unsure than previously.

No extra borrowing

Consistent with my belief that the Chancellor does not want to spook gilt markets at a time of stress across the sovereign fixed income space, the lobby briefing is there will be no additional borrowing in this Budget. This is also consistent with the Chancellor sticking to his self-imposed fiscal rules, which means debt falling as a share of GDP by the end of the parliament in 2029/30.

However, I think the Chancellor is avoiding taking important decisions at the Budget to enable this event to pass off relatively calmly. One, he can follow his predecessor in backloading spending cuts that he has no intention of making and tax hikes to the end of the assessment period, balancing the books with a sleight of hand. The IFS points out that “pencilling in implicit cuts that he has no intention of delivering would make the Budget a work of fiction”. Two, publication of a review of the welfare system is being delayed until after the Budget due to cost concerns. Three, the decision on accepting a timeline to reach spending 3% of GDP is expected to be delayed until next year’s Budget. All this to avoid painful decisions being taken now. Moreover, Burnham’s flagship national care service and pension triple lock reform are all for the next manifesto.

Kicking big decisions down the road is not unique to the Burnham government. However, I think in this case the political backdrop and Burnham’s own agenda mean doing so today is less about political expediency and clinging to credibility than it is about laying the pathway to an early election next year to deliver the mandate Burnham seeks to carry out more radical reforms.

CGT: No equalisation with income tax

There will not be large increases to capital tax gains, with the Chancellor reportedly not considering equalising CGT with income tax as he has been urged to by some cabinet colleagues.

Rachel Reeves hiked CGT rates from 10% and 20% for basic and higher rate taxpayers respectively to 18% and 24%. The annual exempt allowance has also fallen sharply in recent years from £12,300 as recently as 2022/23 to £3,000 today for individuals, and £1,500 for most trusts.

However, a more modest rise in CGT is still a viable option, which would have implications for investors and property. However, various economic modelling suggests raising CGT can lower the overall tax take. The last data we have from the government* indicates the increase to CGT rates since April 2026 leads to a net loss to the Treasury in most years. Notably this shows that that a 10-percentage point increase on the higher rate of CGT reduces revenue collected by £3.6bn by 2028/29. I looked more into CGT here.

Mansion tax: No cut to £1.5mn

Reports suggest Healey has ruled out cutting the ‘mansion tax’ threshold from £2mn to £1.5mn. The levy, first announced by Rachel Reeves last year, will begin in April 2028 and will require homeowners to pay anything from £2,500 a year up to £7,500 for the most expensive properties valued at over £5mn.

Online retailer tax

A crackdown on mainly foreign online sellers is expected to raise around £1bn by making marketplaces like Amazon and eBay responsible for collecting VAT upfront. It’s expected this will used to offset plans to raise the threshold for business rates to exclude around 140,000 small high street shops from business rate, which is expected to cost about £900mn.

And one we still don’t know: banks

There’s been a heap of speculation about raising tax on banks. They've become super profitable and politically they are easy targets, a point I made earlier in this Budget cycle. However, Healey has been sounding less grabby. Speaking in Bangkok this week at the IMF he said banks are “hardwired into the economic fabric of this country and our future prospects”. Then, to Bloomberg, he described banks as the “jewel in the crown” of the UK economy. A romantic flourish perhaps but one that doesn’t shout a hike to the bank surcharge is in the offing.