Budget 2026 forecasts: Which records have been set and milestones passed?

Here the Press Association looks at what those forecasts suggest about the likely future of the country’s finances – and how they compare with decades gone by.

– Tax burden to reach new all-time high

The UK’s tax burden was already on track to hit record levels in the next few years, but the figure is now likely to peak even higher than previously expected.

The tax burden, or tax take, is a measure of how much the Government collects in taxation, expressed as a proportion of the total value of the economy.

The Office for Budget Responsibility (OBR) forecasts the tax burden to “increase sharply” from 36.0% of GDP in 2025/26 to a new record of 37.9% in 2027/28, then continue to climb to reach a peak of 38.6% of GDP in 2031/32.

This is nearly six percentage points above the pre-pandemic figure of 32.9% in 2019/20 and is the highest level since current records began in 1948.

The “single largest driver” of the increase in the tax burden is rising income tax and national insurance contributions, “especially with personal tax thresholds frozen”, the OBR said.

The Government has frozen the level at which higher rates of income tax start to be paid, meaning that as wages increase, more people have to pay more tax on their earnings.

– Growth in living standards to fall to a record low

The level of real household disposable income (RHDI), which is one measure of living standards, has shown “historically weak growth” since the global financial crisis of 2008 and 2009, the OBR said.

Growth in RHDI slumped to a record low in the decade to 2025/26, averaging 0.3% per person per year.

This is now forecast to fall even further, averaging only 0.1% in the 10 years to 2029/30.

It means that at the end of this decade, RHDI per person is expected to be just 1% higher than pre-pandemic levels.

While earnings and social security benefits have boosted household incomes in recent years, these have been outweighed by higher prices, together with taxes on income and wealth, the OBR added.

– Debt as percentage of GDP remains at levels last seen in early 1960s

The headline measure of public sector net debt in the UK, which includes the Bank of England, is forecast to climb from the equivalent of 93.1% of GDP in 2025/26 to 97.3% in 2028/29.

This level of debt was last seen at the end of the financial year 1962/63, when it stood at 98.2% of GDP: a time when Harold Macmillan was Conservative prime minister, there were only two television channels in the country, and The Beatles had just released their debut album Please Please Me.

Meanwhile, the volume of debt is forecast to continue rising in every year of the OBR forecast, passing £3 trillion for the first time in 2026/27 and reaching £3.70 trillion by 2031/32.

– Net migration to fall close to pandemic levels

Net migration to the UK is forecast to be lower than previously expected and will fall close to numbers seen during the Covid-19 pandemic, when travel restrictions limited the movement of people around the world.

The level of net migration – the difference between the number of people moving long term to the country and those emigrating – is now forecast to be 120,300 in the year to June 2026, compared with 200,000 in the previous forecast in March.

Migration is then forecast to fall to 114,300 in the year to June 2027, nearly 100,000 lower than the previous forecast of 203,400.

This is close to the figure of 111,000 for the 12 months to June 2020, which included the start of the pandemic.

The fall in migration is likely to reflect several factors.

There has been a decline in people from outside the European Union coming to the UK for work-related reasons.

This follows policy changes introduced by the previous Conservative government and continued by the current Labour administration, which have tightened the rules for coming to the country for employment.

There have also been fewer arrivals in the UK through official humanitarian resettlement schemes, as well as an increase in people moving out of the country.

Migration levels are likely to increase slowly from 2028 onwards, settling at 230,000 in the early 2030s.

“This rise largely reflects our assumption that the net outflow of British nationals and EU nationals who arrived under the pre-Brexit immigration regime will gradually lessen,” the OBR said.

– Longest sustained period of high government spending since Second World War

Total government public spending is forecast to remain at the equivalent of between 44% and 46% of GDP for 10 financial years in a row.

This is around five percentage points higher than before the Covid-19 pandemic.

It also represents the longest sustained period of spending at this level since the Second World War.

The forecast suggests spending will not fall below the equivalent of 44% of GDP in each year from 2022/23 to 2031/32 inclusive.

This easily surpasses the two other post-war periods when spending was 44% of GDP or above, in the three years from 1974/75 to 1976/77 and the three years from 2009/10 to 2011/12.

Spending at the end of the last century, in the financial year 1999/2000, stood at 34.6% of GDP.

– Spending on health and disability benefits to reach record £100 billion earlier than forecast

The amount of government spending on health and disability benefits had been forecast to hit a record £100 billion in 2029/30.

This is now likely to happen a year earlier, with spending reaching £105.0 billion in 2028/29, up from £85.6 billion in 2025/26.

The OBR says there is “uncertainty” around the outlook for welfare spending, especially related to health and disability benefits “which have seen very significant rises in caseloads since the pandemic”.

The main forecast has been calculated on the assumption that cases will continue to rise but at a slower rate than earlier in the decade, with total welfare spending increasing from £333.8 billion in 2025/26 to £431.3 billion in 2031/32.

However if cases were to continue to rise at the post-pandemic growth rate, “this could add around £25 billion to welfare spending by 2031/32”, the OBR said.

Alternatively, if cases slowed to pre-pandemic rates, spending could be around £13 billion lower by the end of this period.