Reader Q&A: Our money and economics correspondents answer your Budget ۲۰۲۶ questions – live

Guardiangirl۶۶ asks: Why are governments so stubbornly opposed to lifting the basic tax threshold? They adjust them to fit some people affected by fiscal drag but not others, which can’t be cheap to implement and it isn’t fair either.

Tax thresholds need to be universally applied in each band, and be simple and crystal clear. Some tapering is overdue to avoid cliff edges and high marginal tax rates but it must be for everyone.

Heather says: If you mean the basic rate threshold, it did rise repeatedly from ۲۰۱۰-۲۰۲۰, starting under the Conservative/LibDem coalition, to ۴۴% of average earnings – but yes it’s been frozen for quite a while since, so it kicks in at about ۳۴% of average earnings now. I think the Labour objection to raising it further would be that it’s not a very progressive way of making a tax cut, because it’s set so high already (£۱۲,۵۷۰) that the lowest earners already don’t pay tax and so wouldn’t benefit from further rises. Completely agree re complicated tweaks to the system, though – the simpler and clearer it is, the better.

southlondon۱ asks: Is there anything in this budget for young working people? I’m ۲۷, renting a ۱ bed with my partner in London, and barely earn enough money to save £۵۰ a month, let alone save for a house. I feel like yet again the government are leaving out people like me who are nowhere near buying a house, have no children (and couldn’t afford it anyway) and our rent costs half our salary. £۱۰۰ doesn’t really provide any breathing space.

Hilary says: The main measure for young renters was the Your First Home scheme, which will mean you can think about buying a property when you have a deposit of ۲.۵%, but in London if you can only save £۵۰ a month that is likely to feel a long way off. Unfortunately there was not much else that’s immediately going to help you.

The thresholds for student loan repayments and income tax remain the same, so if you get a pay rise you will see your take home pay go up by less than had these risen in line with inflation. The £۱۰۰ energy payment comes alongside the removal of VAT on your electricity bills, and the planned removal of the standing charge on gas, so that’s a bit more money you will keep. However, with energy prices looking set to rise in January it’s likely you will still see your bills rise.

CordTrousers asks: Diesel is still at £۱.۹۹ a litre at our local station. That means inflation is going to remain elevated, as it feeds through to more everyday commodities there is going to be building pressure for wage increases … Which will fuel inflation some more. After the midterms, it looks likely Trump will renew his attacks on Iran. A light touch budget like this then, feels a temporary measure. Really there’s nothing the UK can do but tighten its belt when we have such a constraint on fuel supply, is there?

Heather says: You’re absolutely right that as an energy-importing country, it’s just a fact that a crisis like the one we’re going through makes us poorer. So I think John Healey’s message that the government can’t completely insulate consumers, but want to do a bit to help, is probably the right one. But whether he’s done enough remains to be seen – inflation is set to rise further, as you say, and the Bank of England is likely to raise interest rates next week, so that £۱۰۰ cost of living payment might not look so generous by the New Year. Obviously the government is hoping the Iran conflict will subside, which might allow oil prices to fall, and the economy to bounce back (GDP growth was actually pretty strong in the first half of this year). Time will tell.

Hilary and Heather are online now answering your ۲۰۲۶ budget questions

Yesterday Chancellor John Healey gave his maiden budget under Andy Burnham’s leadership, announcing measures to cut energy bills funded by a windfall tax on banks. He characterised his plan as “a budget built on fiscal discipline” fit to face “global economic storms” that are driving up up energy prices.

Does Healey’s budget represent a break with the past, or is the lower-than-expected tax on banks just another example of tinkering around the edges by another Chancellor fenced in by self-imposed fiscal rules?

Hilary Osborne, the Guardian’s money and consumer editor will be joining economics editor Heather Stewart from ۳pm (GMT) today to answer your questions on the outlook for our economy.

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