Chancellor John Healey has warned that the upcoming autumn Budget will be difficult to manage, largely due to the effects of global tensions, especially the ongoing conflict between the United States and Iran. These tensions are contributing to rising inflation, slower economic growth, and higher borrowing costs. Healey emphasized that the UK is navigating a more dangerous and uncertain world, and that the government must work closely with other nations to address these challenges. Healey pointed out that the financial cushion created by his predecessor, Rachel Reeves, through tax increases and spending cuts, might be weakened by inflation caused by global instability. This could hinder efforts to tackle the current cost-of-living crisis and other government spending plans. However, he did not specify how much financial flexibility he intends to retain after the Budget. A key fiscal rule requires the Treasury to achieve a Budget surplus by the end of the current Parliament, excluding investments. Healey confirmed that both he and the prime minister are committed to meeting this goal, while also maintaining a buffer to deal with uncertainties. This rule is intended to ensure the government maintains fiscal discipline while managing economic risks. Healey has faced criticism from the Conservative Party for not recommitting to spending 3% of GDP on defense by 2030. However, he stated that the UK will meet its NATO commitment to increase defense spending to 3.5% of GDP by 2035. More details on how this will be achieved are expected in next year's spending review. In addition, Healey announced changes to Treasury rules aimed at boosting regional development. One major change involves reducing the "discount rate" from 3.5% to 3%, which will make it easier to justify long-term public investments in infrastructure, such as new schools and roads. This update comes ahead of a major speech on the economy that Healey is scheduled to deliver.