Budget likely to provide a few scares for Halloween

Chancellor of the Exchequer John Healey | Paul Reid/Press Association

The world is in a mess, house prices are stagnant, energy bills are rocketing just in time for winter and inflation is climbing, with interest rates expected to be raised as a result. And in case that wasn’t enough, government borrowing and UK public sector debt are also going up, up and up again..

Hardly a surprise that an Opinium survey for the British Retail Consortium (BRC) found that expectations for the state of the economy and for their personal finances over the next three months had slumped into negative figures..

All bad then - so imagine the creeping dread faced by a chancellor who is now expected to sort it all out at what will be his first ever budget.

All eyes will be on John Healey next week as he provides a warm-up to the spookiest day of the year with the Autumn Budget.

Healey has promised to keep Labour's commitment not to hike the three main taxes - income tax, National Insurance and VAT - while sticking to the party's fiscal rules.

If he is somehow to perform that trick while tackling a potential £35 billion fiscal shortfall and helping struggling families and businesses across the UK, it will surely have required some very dark magic.

Like any good chancellor in recent years he’s been playing his cards close to his chest, while also teasing out potential good and bad points of his plans in advance. This allows him to test the waters of any particular policy and also avoids the risks of spooking increasingly nervous markets with any sudden unexpected announcements, a la Kawsi Kwarteng and Liz Truss.

And good news for people facing financial hardship, as he said he would “look to do more” to give people “a bit of breathing space on the costs of living”. Not exactly a firm promise of help, but I suppose at this point we’ll take any crumb comfort tossed our way.

The Chancellor has at least acknowledged that Britain finds itself in a “tough” position, and is reported to be downplaying the prospect of major revenue-raising measures in his October 28 statement.

It was widely reported that he has rejected calls to hike capital gains tax, despite the urgings of prominent Labour voices to hike the tax applied to the profit made from selling off assets like a house or shares. Mr Healey reportedly ruled out the move after warnings it could end up costing the Government money if wealthy people leave the country or defer selling off assets, according to the Times.

For banks though, it could be the nightmare before Christmas, with an increase in the rate they pay on their profits expected to be the biggest revenue raising measure announced by the chancellor as he looks for a way to fund cost-of-living support for households and businesses.

For now we wait to see what Mr Healey pulls out of his red briefcase, safe in the knowledge that it’s likely to sound impressive but actually be incredibly cautious, meaning it will have very little effect on the economy - and so even less effect on the finances of households across the UK - and might just see us all through until next year when, just like the rest of us, he’ll be hoping things are a little less horrifying.