The Resolution Foundation has warned Britain faces a painful second half of this Parliament, after its overnight analysis of the 2026 Budget found cost-of-living help is spread too thinly. In its report Spread Thin, published on 29 October 2026, the think tank says typical energy bills, after support, are forecast at £1,750 this year — higher in real terms than the £1,685 recorded during the last energy price shock in 2022-23.

Help that reaches rich and poor almost equally

The Foundation's central complaint is targeting. The poorest half of households will gain £158 on average from cost-of-living support this year and next, only £14 more than the £144 gained by the richest half. It also criticises the machinery behind the help: eligibility for energy bill support this winter still rests on property valuations that are 35 years old, the report says.

A Parliament of two halves

Departmental budgets received a £9 billion top-up over the spending review period, twice the £4.4 billion cost-of-living package. Looking further ahead, if defence hits 3 per cent of national income and real health spending keeps growing at 2.6 per cent a year, funding for 13 "unprotected" departments would fall to 4.7 per cent of GDP by 2031-32.

Markets take the Budget in their stride

On living standards, the report says median real disposable incomes for working-age households will grow by only £600 across the Parliament — and that those gains are already behind us. From now until 2028-29, typical incomes are forecast to fall by £1,050, or 3 per cent. Financial markets barely reacted: Reuters reported the ten-year bond yield fell 2 basis points to 5.323 per cent and the FTSE 100 rose 0.1 per cent.

Sources: Resolution Foundation, Reuters.