Chancellor’s headroom ‘to halve because of Iran war inflation and weak growth’
- Posted on September 21, 2026
- By Evening Standard
- 1 Views
- 1 min read
In brief
UK Chancellor faces significant fiscal constraints as economic pressures mount. According to KPMG analysis, available budgetary flexibility could decline substantially from £23.6 billion in spring to approximately £12 billion by autumn. This reduction stems from inflationary pressures linked to geopolitical tensions in Iran and sluggish economic growth forecasts. The narrowing fiscal space presents challenges for government spending plans and policy implementation during a critical economic period.
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Chancellor’s headroom ‘to halve because of Iran war inflation and weak growth’
KPMG says John Healey could be left with headroom of about £12 billion in the autumn, down from £23.6 billion in the spring.
