Millions of households will get £100 to help with soaring energy bills to be paid for by a tax on bank profits, John Healey has announced in his first Budget.

The chancellor said he wanted to give hard-pressed families "breathing space now" and "hope for the future" as the UK economy is battered by "global economic storms".

He also unveiled tax breaks to boost high street businesses - but confirmed that many big decisions, including on defence spending and welfare, will not be made until next year.

Conservative leader Kemi Badenoch said Healey's plans were "not bold enough" and the government was "overspent, overborrowed, overtaxed and drowning in an out-of-control welfare system".

In an hour-long speech to a packed House of Commons, with Prime Minister Andy Burnham and other frontbench colleagues cheering him on, the chancellor unveiled a string of measures aimed at cutting the cost of living.

These include:

Healey increased the tax on the profits of big banks from 3% to 6%, which will last from January next year to April 2028, and increased taxes on high-stakes gambling machines.

As part of a package to help business, Healey increased the point at which High Street shops in England start paying business rates from £12,000 to £18,000, with vape shops and adult gaming centres excluded from the relief.

But he had little scope for big giveaways as the public finances remain stretched, with the UK set to spend £14bn more on debt interest payments this year.

Income tax thresholds will remain frozen and the tax on income from savings and property rental will rise to 24% for basic rate taxpayers from April 2027, after it had been scheduled to go up to 22%.

But a cut to the cash ISA allowance from £20,000 a year to £12,000, announced last year by Healey's predecessor Rachel Reeves, will be axed.

The Office for Budget Responsibility (OBR) downgraded its growth forecast for next year to 1%, with slightly higher increases predicted for subsequent years.

In its latest assessment, the OBR said British households were set to be little better off than before the Covid pandemic even a decade after Covid-19 hit, a situation the watchdog's boss David Miles described as "pretty grim".

In his Budget speech, Healey repeatedly stressed that the UK economy was being battered by "global uncertainties" and soaring oil prices caused by conflict in the Middle East.

"Those are the storms we face. We can't wish them away. We must choose the course we steer through them," he told MPs.

Healey also used his speech to announce plans to allow regional mayors to keep 20% of business rates and a share of income tax to spend on local priorities.

The aim was to allow mayors to retain 100% of business rates raised in their areas by the end of the decade, he added, in "the most radical act of devolution in a generation".

And he sought to address opposition claims the Labour government is unwilling to cut benefits, insisting that both he and Burnham were committed to bringing down the welfare bill in a "Labour way".

But he said no decisions would be taken until reviews by Alan Milburn, into young people not in work or training, and Stephen Timms, on Personal Independence Payments, had been published, with legislation to follow next year.

The £4.7bn black hole in the defence investment plan will be funded, the chancellor revealed, in part through taking money from capital budgets across Whitehall.

Healey said he will set out how the government plans to meet its commitment to spend 3% of the national income on defence by 2030, and 3.5% by 2035, at next year's spending review.

But Badenoch said he "should have set out a plan for 3% today," highlighting his claim when he resigned as Sir Keir Starmer's defence secretary in June that UK forces were at risk due to a lack of cash.

"So now he is the man who is increasing risk to personnel on operations, he is the man who is making our country less safe, he has failed his own test," the Conservative leader said.

"This is on him and no-one will ever forget. If he had any decency he would resign again today."

The Tory leader said that with the UK heading for a record tax burden and "spending more on debt interest than on the army and schools combined", Healey's Budget was "not good enough, not strong enough, not bold enough".

Helen Miller, director of the Institute for Fiscal Studies, said the Budget "has a raft of fiddly measures but very little that will move the dial on growth".

Lib Dem leader Sir Ed Davey said that until the government has "the courage" to fix the UK's trading relationship with the EU any Budget will just be "tinkering around the edges" and will not provide the growth the country needs.

Reform UK leader Nigel Farage said the Budget was full of "little giveaways" but "doesn't overall do very much" and did not offer "anything of any value on defence whatsoever".

Healey also faced criticism from the left, with the general secretary of the Unite union, Sharon Graham describing the cost of living measures in the Budget as "baby steps".

"Scrapping standing charges on gas and a £100 energy payment for households in council tax bands, A to D, whilst welcome, will not touch the sides, when many forecasts show bills set to jump over £400 in January," she added.

Green Party leader Zack Polanski said it was a Budget "that betrays the future for young people and the planet they inherit".

He added: "The chancellor didn't mention climate once but praised bankers repeatedly."

Sign up for our Politics Essential newsletter to keep up with the inner workings of Westminster and beyond.