UK Autumn Budget: A test of credibility
The UK’s Autumn budget will be closely watched by the gilt market. Barclays Research team expect the most important outcome will be the market’s reaction.
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RESEARCH | UK Autumn Budget 2025
A delicate balancing act for the UK economy
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That disconnect is central to the story heading into 2026. The household savings rate is 10.7% (up seven percentage points since 2022*), which is moderating consumption even as real incomes begin to improve. Pandemic-era “excess savings” have been eroded, likely to negative terms, so our Research analysts expect the savings rate to ease only gradually, providing a modest tailwind to spending over time. This isn’t a “big spend” recovery.
Our Research analysts expect unemployment to edge up to just above 5% in early 2026, as slower growth feeds through to hiring.
Cooling labour demand is easing wage pressures. Private-sector regular pay growth has slowed from 8.2% last year to 4.5% now, and new wage settlements are clustering around 3%. With inflation expected to return to target, real wage growth should resume in 2026, modestly but sustainably.
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About the experts
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