Chancellor John Healey has announced a one-off £100 energy payment for millions of households, to be funded by an increased tax on bank profits, in his first Budget speech.

Delivered to a packed House of Commons, Healey stated the measures were designed to offer "breathing space now and hope for the future" as the UK economy faces significant global economic challenges.

The £100 energy payment will be available to households in England falling within council tax bands A to D. Both the Welsh and Scottish governments have indicated they intend to match this payment. Additionally, gas standing charges in England, Scotland, and Wales are set to be scrapped during 2027 or as soon as possible thereafter. These fixed daily fees will be reallocated to the price per unit of energy, potentially impacting heavy gas consumers.

The government will also extend the temporary 5p cut in fuel duty on petrol and diesel until July. Minimum wage rates are slated for a 3.9% increase in April. Healey raised the tax on large banks' profits from 3% to 6%, a measure that will be in effect from January next year until April 2028. Taxes on high-stakes gambling machines were also increased.

In a move to support high street businesses, the threshold for business rates in England will be raised from £12,000 to £18,000, though vape shops and adult gaming centres are excluded from this relief. However, the Budget offered limited scope for major spending increases due to strained public finances, with the UK anticipating an additional £14 billion in debt interest payments this year.

Income tax thresholds will remain frozen, and the tax on income from savings and property rentals will rise to 24% for basic rate taxpayers from April 2027, an increase from the previously scheduled 22%. A planned cut to the cash ISA allowance, which would have reduced it from £20,000 annually to £12,000, has been rescinded.

The Office for Budget Responsibility (OBR) has downgraded its growth forecast for the upcoming year to 1%, with modest increases anticipated in subsequent years. The OBR's assessment suggests British households may see little improvement in their financial standing compared to the pre-Covid pandemic era, even a decade after the pandemic's onset, a situation described by the watchdog's head, David Miles, as "pretty grim."

Healey's announcement was met with criticism from Conservative leader Kemi Badenoch, who argued the plans lacked boldness and accused the government of being "overspent, overborrowed, overtaxed and drowning in an out-of-control welfare system."