Tories and banks prepare for early election amid ‘boring Budget’ expectations

Polling experts sceptical but opposition parties and financial institutions anticipate a snap vote

By LineZotpaper AI staff

Published25 October 2026

Read Time2 min

Opposition parties and financial institutions are actively preparing for an early UK general election, expecting Chancellor John Healey to deliver a deliberately low-key Budget on Wednesday despite public denials by Prime Minister Andy Burnham, according to multiple sources.

A source close to Conservative leader Kemi Badenoch told The Independent that an Ipsos poll showing Labour would win a majority of more than 130 has reinforced expectations of an election, possibly in May or even earlier. A Tory source said Wednesday's Budget would mark the end of the "phoney war" and that its contents would dictate whether an early election is called.

The Dutch bank ING briefed clients that an early election is "under priced". ING economist James Smith noted that Burnham's ambition for a 10-year project now appears to be operating on a three-year timeline, and that the spending review delayed until next autumn points to an election before it takes place. He said policies such as bus fares and VAT off energy bills are "eye-catching stuff" that cost little and are the sort of thing one does ahead of an early election.

Chancellor Healey is expected to hit banks with a levy raising the tax on their profits from 3 per cent to up to 8 per cent, but has turned down demands for a capital gains tax hike and ruled out increases to income tax, VAT and employee national insurance. There are also plans for help with energy bills for low-income households and measures to end rough sleeping. However, he may face a showdown with trade unions by not fully funding public sector pay rises.

Shadow chancellor Andrew Griffith said the Conservatives would go through the Budget with a "fine-toothed comb" to ensure facts are not hidden. Polling experts remain sceptical. Professor Sir John Curtice said the UK is "not in early election territory yet" and the government still needed to point to better economic times. Lord Robert Hayward warned that a "steady-as-she-goes" Budget would be interpreted as taxes later and that an early election would risk Labour losing its majority.

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Analysis

Why This Matters

The Budget will set the direction of UK fiscal policy and signal the government's economic priorities.
An early election could disrupt long-term planning and unsettle financial markets, which have valued recent fiscal stability.
The government's ability to deliver on ambitious pledges depends on the Budget's reception and the timing of the next election.

Background

Prime Minister Andy Burnham has publicly described his premiership as a 10-year project, but the delay of the spending review until next autumn and the announcement of eye-catching but inexpensive policies have fuelled speculation of a snap election. Chancelor Healey is preparing his first Budget on Wednesday, under commitments inherited from Sir Keir Starmer's manifesto not to raise income tax, VAT or employee national insurance. The government also faces pressure from trade unions over public sector pay.

Key Persectives

Kemi Badenoch's inner circle: Believes an early election is “highly likely” after a poll showing Labour eight points ahead, and is preparing candidates for target seats. ING economist James Smith: Says an early election is “under priced” and that the combination of a boring budget, a delayed spending review and ambitious pledges makes an early vote likely. Professor Sir John Curtice: Argues the UK is “not in early election territory yet” and a steady budget risks failing to convince voters of economic improvement. Lord Robert Hayward: Warns that a “steady-as-she-goes” Budget will be interpreted as taxes later, and that calling an early election would be too risky for Labour, which could lose its majority.

What to Watch

Wednsday's Budget announcements, particularly any changes to bank taxation or debt measurement methods.
Future opinion polls to see whether Labour's lead holds or widens.
Market reaction, especially if the Budget or election speculation raises questions about fiscal discipline.

Sources

Tories and banks believe Healey’s ‘boring Budget’ could signal early election · The Independent UK

Checked

10 claims in this story checked against 1 source: 6 supported.

Show each claim

SupportedTories and banks are preparing for an early election amid expectations of a “boring Budget”.The Independent UK: “Opposition parties and financial institutions are actively preparing for Andy Burnham to call an early election in anticpiation of a “boring Budget””
SupportedPolling experts are sceptical, while opposition parties and financial institutions anticipate a snap vote.The Independent UK: “Polling experts remain sceptical about an early election”
Partly supportedThe parties and financial institutions expect a deliberately low-key Budget on Wednesday.The Independent UK: “with expectations that he will keep changes to a minimum.”
SupportedA source close to Kemi Badenoch said an Ipsos poll suggested Labour would win a majority of more than 130, reinforcing election expectations, possibly in May or earlier.The Independent UK: “A source close to Kemi Badenoch told The Independent that an Ipsos poll out this weekend, which suggests Labour would win a majority of more than 130, has added to their expectation of an election, possibly in May or even earlier.”
Not in the sourcesING briefed its clients that an early election is “under priced”.The Independent UK: “ING economist James Smith told a pre-Budget briefing in London that an early election is “under priced”.”
SupportedJames Smith said Burnham’s 10-year project now appears to be operating on a three-year timeline.The Independent UK: “Burnham said back in August that this is a 10-year project. Currently, it's a three-year project.”
SupportedJames Smith said the delayed spending review points to an election before it takes place.The Independent UK: “the upcoming spending review, which has already been delayed until next autumn. “It’s the sort of thing you do after an election. I think that’s why there’s growing talk about whether you get an election next spring or summer ahead of that.””
SupportedHealey is expected to raise the tax on banks’ profits from 3 per cent to up to 8 per cent.The Independent UK: “The chancellor is expected to hit banks with a levy increasing the tax on their profits from 3 per cent to as much as 8 per cent.”
Partly supportedHealey turned down demands for a capital gains tax rise and ruled out increases to income tax, VAT and employee national insurance.The Independent UK: “Mr Healey is understood to have turned down demands from cabinet colleagues for a hike in capital gains tax while he and Mr Burnham have insisted they will stick to Sir Keir Starmer’s election manifesto promise not to raise income tax, VAT or employee national insurance contributions.”
Partly supportedLord Robert Hayward warned that a “steady-as-she-goes” Budget would be read as taxes later and that an early election would risk Labour losing its majority.The Independent UK: “A steady-as-she-goes Budget will simply be interpreted as taxes later. An early election will be too much of a risk because Labour would probably lose its majority.”