With UK public-sector borrowing £6 billion above the official forecast through September, Deutsche Bank expects the Oct. 28 Budget to pair temporary tax relief with later revenue gains, FXStreet reported.
The Office for National Statistics (ONS) said public-sector net borrowing totaled £97.8 billion in the financial year through September 2026, £6 billion above the Office for Budget Responsibility (OBR) forecast for that period. The figures set the fiscal context for a Budget whose policy effects have not yet been announced.
FXStreet reported that Deutsche Bank expects about 25 to 30 Budget measures, nearly 20 focused on revenue. The bank expects temporary discounts to reduce receipts in 2026/27 and 2027/28, followed by revenue gains from tax measures beginning in 2028/29. It estimates £4.3 billion in additional receipts by the end of its forecast horizon.
Deutsche Bank projects fiscal consolidation of £6 billion in 2029/30, rising to £7.5 billion in 2031/32. Its forecast also includes about £3 billion in higher spending in 2031/32. Net spending is expected to rise by about £1 billion in each of the first two fiscal years, then stay broadly neutral; total managed expenditure is projected at about £1.7 trillion in 2031/32, roughly £30 billion above the Spring projection.
FXStreet’s summary points to a higher bank surcharge, VAT liability for online marketplaces and dividend taxes as possible revenue channels. HM Revenue & Customs (HMRC) says the bank surcharge is 3%. HMRC and HM Treasury consulted in June on making online marketplaces liable for VAT on sales by UK businesses through their platforms, but the consultation did not confirm a Budget change. The basic and higher dividend-tax rates already rose by two percentage points in April 2026 under the previous Budget, according to HM Treasury’s official costings. FXStreet gave no proposed rates or separate revenue estimates and did not say whether its dividend-tax reference assumes another increase.
The forecast relief includes business-rates discounts for hospitality and other exposed sectors, raising the small-business relief threshold from £12,000 to £18,000, ending Climate Change Levy indexation and income-tax relief for low-income pensioners. Those measures would direct forecast support to businesses and pensioners.
The OBR’s next Economic and Fiscal Outlook is due Wednesday, Oct. 28, after the Chancellor presents the Budget.
