Chancellor John Healey is preparing a cautious first Budget on Wednesday as the UK government attempts to support households facing high energy costs without intensifying pressure in the bond market. The package is expected to combine targeted help with higher taxes on banks, gambling companies and online marketplaces, including Amazon and Temu.

The Budget is the most significant UK business and finance story of the day because it will shape the tax and regulatory environment for major employers, financial institutions and retailers while testing investor confidence in the new government’s fiscal strategy.

A balancing act for the Treasury

Healey is expected to freeze fuel duty and announce measures designed to provide immediate relief from household costs. The government also plans longer-term reforms intended to reduce energy bills and make the economy more resilient to external shocks.

For businesses, the Chancellor is expected to offer administrative relief by reducing paperwork, a move the government says could save companies about £800m a year. The measure comes as employers continue to face pressure from elevated operating costs and previous tax increases.

Higher taxes for banks and digital platforms

The Treasury is expected to raise additional revenue from banks, gambling firms and online marketplaces. The proposals would place the financial sector and large digital platforms at the centre of the government’s effort to fund support for lower-income households while maintaining its fiscal position.

HSBC has emerged as an immediate focus of the debate after reporting a 32% year-on-year increase in third-quarter pre-tax profit to $9.6bn, equivalent to about £7.2bn. The result has prompted renewed calls for a higher bank-tax burden, although HSBC’s chief financial officer said the group was not under pressure to relocate from the UK.

Markets await the details

Investors have approached Budget day cautiously. The FTSE 100 closed 0.8% lower on Tuesday at 10,686.54, while sterling traded near a 17-month low against the euro ahead of the announcement.

The government’s central challenge is to provide visible help without undermining confidence in public finances. Additional taxes may improve the Treasury’s room for manoeuvre, but businesses and investors will scrutinise whether the measures weaken competitiveness or create uncertainty over future policy.

The Budget will also be followed closely by international markets, with the US Federal Reserve scheduled to announce its interest-rate decision later on Wednesday. That combination leaves UK assets exposed to both domestic fiscal news and wider shifts in global borrowing costs.

What businesses will watch

• The scale and duration of the fuel-duty freeze.
• Which banks, gambling companies and online marketplaces will face higher taxes.
• Whether promised reductions in business paperwork are delivered in practice.
• How the measures affect gilt yields, sterling and business investment.

Healey’s first Budget is therefore less a single tax announcement than an early test of the government’s economic credibility. Its success will depend on whether it can offer households immediate breathing space while convincing markets and companies that the UK remains a predictable place to invest.