Further to this, in a (plausible) scenario presented by the OBR, official plans imply that "unprotected" departments would face cuts of >3% per year, equivalent to more than £20 billion, between 2029 and 2031. That includes police, courts, job centres, colleges, prisons, HMRC, border force... 🤔
November 27, 2025 at 1:02 PM
Further to this, in a (plausible) scenario presented by the OBR, official plans imply that "unprotected" departments would face cuts of >3% per year, equivalent to more than £20 billion, between 2029 and 2031. That includes police, courts, job centres, colleges, prisons, HMRC, border force... 🤔
Reposted by Ben Zaranko
Underrated part of yesterday's Budget was what's happening to public service spending in 2028-29. Spending Review settlements reopened just 5 months after the SR to account for loosely-specified 'efficiency savings' of £1.4bn in 28-29 (rising to 4bn in 29-30)
November 27, 2025 at 11:58 AM
Underrated part of yesterday's Budget was what's happening to public service spending in 2028-29. Spending Review settlements reopened just 5 months after the SR to account for loosely-specified 'efficiency savings' of £1.4bn in 28-29 (rising to 4bn in 29-30)
Having now mulled overnight, a few aspects of the Budget where the government deserves some credit:
1) Increasing fiscal headroom
2) A plan for how to tax electric cars, at last (even if imperfect)
3) A plan to gradually undo the "temporary" 5p cut in fuel duty
1) Increasing fiscal headroom
2) A plan for how to tax electric cars, at last (even if imperfect)
3) A plan to gradually undo the "temporary" 5p cut in fuel duty
Some immediate Budget takes from @helenmiller.bsky.social and the IFS hive mind at the link below.
What's most striking, to me at least, is the decision to rely so much on tax rises that kick in at the back end of the parliament - just in time for the next election...
What's most striking, to me at least, is the decision to rely so much on tax rises that kick in at the back end of the parliament - just in time for the next election...
“This was a big Budget, but not in the way people were necessarily expecting.” – @helenmiller.bsky.social
📗 Our immediate IFS response to #Budget2025 is out now: ifs.org.uk/articles/aut...
📗 Our immediate IFS response to #Budget2025 is out now: ifs.org.uk/articles/aut...
November 27, 2025 at 12:15 PM
Having now mulled overnight, a few aspects of the Budget where the government deserves some credit:
1) Increasing fiscal headroom
2) A plan for how to tax electric cars, at last (even if imperfect)
3) A plan to gradually undo the "temporary" 5p cut in fuel duty
1) Increasing fiscal headroom
2) A plan for how to tax electric cars, at last (even if imperfect)
3) A plan to gradually undo the "temporary" 5p cut in fuel duty
Some immediate Budget takes from @helenmiller.bsky.social and the IFS hive mind at the link below.
What's most striking, to me at least, is the decision to rely so much on tax rises that kick in at the back end of the parliament - just in time for the next election...
What's most striking, to me at least, is the decision to rely so much on tax rises that kick in at the back end of the parliament - just in time for the next election...
“This was a big Budget, but not in the way people were necessarily expecting.” – @helenmiller.bsky.social
📗 Our immediate IFS response to #Budget2025 is out now: ifs.org.uk/articles/aut...
📗 Our immediate IFS response to #Budget2025 is out now: ifs.org.uk/articles/aut...
November 26, 2025 at 3:18 PM
Some immediate Budget takes from @helenmiller.bsky.social and the IFS hive mind at the link below.
What's most striking, to me at least, is the decision to rely so much on tax rises that kick in at the back end of the parliament - just in time for the next election...
What's most striking, to me at least, is the decision to rely so much on tax rises that kick in at the back end of the parliament - just in time for the next election...
Reposted by Ben Zaranko
“This was a big Budget, but not in the way people were necessarily expecting.” – @helenmiller.bsky.social
📗 Our immediate IFS response to #Budget2025 is out now: ifs.org.uk/articles/aut...
📗 Our immediate IFS response to #Budget2025 is out now: ifs.org.uk/articles/aut...
November 26, 2025 at 3:06 PM
“This was a big Budget, but not in the way people were necessarily expecting.” – @helenmiller.bsky.social
📗 Our immediate IFS response to #Budget2025 is out now: ifs.org.uk/articles/aut...
📗 Our immediate IFS response to #Budget2025 is out now: ifs.org.uk/articles/aut...
The OBR will now only assess performance against the fiscal rules once per year (in the autumn) but will continue to produce two forecasts each year. Relies on the world understanding that if the OBR forecast a current budget deficit in the spring, it's not technically a breach.
November 26, 2025 at 1:41 PM
The OBR will now only assess performance against the fiscal rules once per year (in the autumn) but will continue to produce two forecasts each year. Relies on the world understanding that if the OBR forecast a current budget deficit in the spring, it's not technically a breach.
There's an interesting political economy angle to the fact that, with basically every single tax parameter frozen in cash terms (and personal tax thresholds now frozen to 2031), inflation is extremely beneficial for the public finances.
Rachel Reeves can count herself (at least a bit) lucky. OBR productivity downgrade would have knocked £16 billion off tax receipts. But she was saved by £32 billion of *extra* receipts from higher inflation and a shift to more tax-rich growth (lower profits, higher wages).
November 26, 2025 at 1:31 PM
There's an interesting political economy angle to the fact that, with basically every single tax parameter frozen in cash terms (and personal tax thresholds now frozen to 2031), inflation is extremely beneficial for the public finances.
Rachel Reeves can count herself (at least a bit) lucky. OBR productivity downgrade would have knocked £16 billion off tax receipts. But she was saved by £32 billion of *extra* receipts from higher inflation and a shift to more tax-rich growth (lower profits, higher wages).
November 26, 2025 at 12:40 PM
Rachel Reeves can count herself (at least a bit) lucky. OBR productivity downgrade would have knocked £16 billion off tax receipts. But she was saved by £32 billion of *extra* receipts from higher inflation and a shift to more tax-rich growth (lower profits, higher wages).
With apologies to the poor person at the OBR who accidentally hit upload...
Key public finance story: smaller OBR downgrade than expected, more borrowing in the short term (extra spending, mostly unanticipated), less borrowing in the medium term (as tax rises kick in).
Key public finance story: smaller OBR downgrade than expected, more borrowing in the short term (extra spending, mostly unanticipated), less borrowing in the medium term (as tax rises kick in).
November 26, 2025 at 12:13 PM
With apologies to the poor person at the OBR who accidentally hit upload...
Key public finance story: smaller OBR downgrade than expected, more borrowing in the short term (extra spending, mostly unanticipated), less borrowing in the medium term (as tax rises kick in).
Key public finance story: smaller OBR downgrade than expected, more borrowing in the short term (extra spending, mostly unanticipated), less borrowing in the medium term (as tax rises kick in).
I've written for this week's @theobserveruk.bsky.social about economic forecasts and how they are (mis)used.
observer.co.uk/news/politic...
observer.co.uk/news/politic...
November 23, 2025 at 3:02 PM
I've written for this week's @theobserveruk.bsky.social about economic forecasts and how they are (mis)used.
observer.co.uk/news/politic...
observer.co.uk/news/politic...
Amidst ceaseless discussion of possible tax rises, it's worth remembering that spending cuts could be part of any Budget consolidation package. One challenge is that detailed department-level spending plans up to 2028–29 were agreed only in June...
We've looked at the options 👇
We've looked at the options 👇
November 19, 2025 at 10:08 AM
Amidst ceaseless discussion of possible tax rises, it's worth remembering that spending cuts could be part of any Budget consolidation package. One challenge is that detailed department-level spending plans up to 2028–29 were agreed only in June...
We've looked at the options 👇
We've looked at the options 👇
This is the point. Policy *should not* be adjusted or fine-tuned in response to minor forecasting judgements. Decisions about whether or not to break a prominent manifesto promise *should not* depend on minor forecasting judgements. This stuff matters. We've got to do better than this.
I know it’s always like this. But one striking thing from the budget kite flying and kite pulling back in, is how major policy decisions are constantly being buffeted around by iterative forecast changes.
All feels a bit of a silly way to be making major economic policy & political decisions.
All feels a bit of a silly way to be making major economic policy & political decisions.
November 14, 2025 at 3:23 PM
This is the point. Policy *should not* be adjusted or fine-tuned in response to minor forecasting judgements. Decisions about whether or not to break a prominent manifesto promise *should not* depend on minor forecasting judgements. This stuff matters. We've got to do better than this.
Reposted by Ben Zaranko
I know it’s always like this. But one striking thing from the budget kite flying and kite pulling back in, is how major policy decisions are constantly being buffeted around by iterative forecast changes.
All feels a bit of a silly way to be making major economic policy & political decisions.
All feels a bit of a silly way to be making major economic policy & political decisions.
November 14, 2025 at 3:18 PM
I know it’s always like this. But one striking thing from the budget kite flying and kite pulling back in, is how major policy decisions are constantly being buffeted around by iterative forecast changes.
All feels a bit of a silly way to be making major economic policy & political decisions.
All feels a bit of a silly way to be making major economic policy & political decisions.
The OBR have now confirmed that they've used the 10 working days before 21 October for their debt interest forecast. Here's my precise graphical depiction of what was happening to yields in that period. Suspect this is why the fiscal forecasts are reported to improved.
November 14, 2025 at 3:07 PM
The OBR have now confirmed that they've used the 10 working days before 21 October for their debt interest forecast. Here's my precise graphical depiction of what was happening to yields in that period. Suspect this is why the fiscal forecasts are reported to improved.
Your regular reminder that, while it doesn't have every policy option under the sun, @theifs.bsky.social Be the Chancellor tool will tell you how much could be raised from a whole raft of policy changes (e.g. cutting higher-rate threshold by £10k raises ~£17bn).
ifs.org.uk/be-chancellor
ifs.org.uk/be-chancellor
November 14, 2025 at 11:56 AM
Your regular reminder that, while it doesn't have every policy option under the sun, @theifs.bsky.social Be the Chancellor tool will tell you how much could be raised from a whole raft of policy changes (e.g. cutting higher-rate threshold by £10k raises ~£17bn).
ifs.org.uk/be-chancellor
ifs.org.uk/be-chancellor
This is the issue with our current fiscal framework and policymaking equilibrium. It's why, once (if?) the UK gets its house in order (i.e. gets to current/primary surplus), we should consider alternatives to pass-fail rules assessed against the point estimate of an uncertain, moving forecast.
Yes! It's intrinsic to the system and can't be designed out. If the government is right on the fiscal envelope, policy is driven by a forecast residual, which by its nature is going to swing positive and negative. If it's not on the envelope, the political economy incentives are to push until it is
November 14, 2025 at 11:45 AM
This is the issue with our current fiscal framework and policymaking equilibrium. It's why, once (if?) the UK gets its house in order (i.e. gets to current/primary surplus), we should consider alternatives to pass-fail rules assessed against the point estimate of an uncertain, moving forecast.
Reposted by Ben Zaranko
I'm not sure it's an altogether positive development that the bond market now features so heavily in UK political coverage. But we are where we are, and if you'd like to understand it better, this podcast is for you.
NEW PODCAST: Are we in hock to the bond market?
🎧 Listen to our latest IFS Zooms In episode with @helenmiller.bsky.social, @benzaranko.bsky.social and Jack Meaning on how the bond market affects the government's decisions and what investors will look for in the Budget: ifs.org.uk/articles/uk-...
🎧 Listen to our latest IFS Zooms In episode with @helenmiller.bsky.social, @benzaranko.bsky.social and Jack Meaning on how the bond market affects the government's decisions and what investors will look for in the Budget: ifs.org.uk/articles/uk-...
November 13, 2025 at 5:50 PM
I'm not sure it's an altogether positive development that the bond market now features so heavily in UK political coverage. But we are where we are, and if you'd like to understand it better, this podcast is for you.
Here's an extraordinarily cynical take: did the government talk up the likelihood of a manifesto-breaking income tax rise in the knowledge that it would push down gilt yields in the window the OBR will use for its forecasts? Rowing back now pushes up yields but too late to enter the forecast on 26th
And there we go 10y opened up 11 basis points erasing 1/3 of the rally since October.
39 minutes until the bond markets make reeves reconsider I reckon.
November 14, 2025 at 8:13 AM
Here's an extraordinarily cynical take: did the government talk up the likelihood of a manifesto-breaking income tax rise in the knowledge that it would push down gilt yields in the window the OBR will use for its forecasts? Rowing back now pushes up yields but too late to enter the forecast on 26th
Considerable risks with this approach: 1) revenues more uncertain; 2) greater risk of damaging economic impacts; 3) lots of angry interest groups, makes U-turns more likely; 4) viewed less favourably by bond market investors, many of whom were expecting an income tax rise.
The UK prime minister and chancellor have 'ripped up' earlier proposals to raise the basic and higher income tax rates, officials have said. on.ft.com/4p819EH
November 14, 2025 at 7:54 AM
Considerable risks with this approach: 1) revenues more uncertain; 2) greater risk of damaging economic impacts; 3) lots of angry interest groups, makes U-turns more likely; 4) viewed less favourably by bond market investors, many of whom were expecting an income tax rise.
I'm not sure it's an altogether positive development that the bond market now features so heavily in UK political coverage. But we are where we are, and if you'd like to understand it better, this podcast is for you.
NEW PODCAST: Are we in hock to the bond market?
🎧 Listen to our latest IFS Zooms In episode with @helenmiller.bsky.social, @benzaranko.bsky.social and Jack Meaning on how the bond market affects the government's decisions and what investors will look for in the Budget: ifs.org.uk/articles/uk-...
🎧 Listen to our latest IFS Zooms In episode with @helenmiller.bsky.social, @benzaranko.bsky.social and Jack Meaning on how the bond market affects the government's decisions and what investors will look for in the Budget: ifs.org.uk/articles/uk-...
November 13, 2025 at 5:50 PM
I'm not sure it's an altogether positive development that the bond market now features so heavily in UK political coverage. But we are where we are, and if you'd like to understand it better, this podcast is for you.
Reposted by Ben Zaranko
Absolutely delighted that our @theifs.bsky.social work evaluating the effects of Sure Start centres won the "Publication of the Year" prize at last night's @smartthinking.bsky.social awards!
It's wonderful to be recognised for the quality and impact of our work.
ifs.org.uk/publications...
It's wonderful to be recognised for the quality and impact of our work.
ifs.org.uk/publications...
November 13, 2025 at 8:57 AM
Absolutely delighted that our @theifs.bsky.social work evaluating the effects of Sure Start centres won the "Publication of the Year" prize at last night's @smartthinking.bsky.social awards!
It's wonderful to be recognised for the quality and impact of our work.
ifs.org.uk/publications...
It's wonderful to be recognised for the quality and impact of our work.
ifs.org.uk/publications...
🚨Economics students! People who know or teach economics students!🚨
The IFS offers summer internships each year. Many of our permanent staff started with one of these. On Monday we're holding an online event to provide more info. Please do come/share.
ifs.org.uk/events/ifs-r...
The IFS offers summer internships each year. Many of our permanent staff started with one of these. On Monday we're holding an online event to provide more info. Please do come/share.
ifs.org.uk/events/ifs-r...
IFS recruitment event 2025: Summer students | Institute for Fiscal Studies
We're offering an opportunity to meet current IFS staff and find out more about our summer placement scheme for current university students.
ifs.org.uk
November 12, 2025 at 2:31 PM
🚨Economics students! People who know or teach economics students!🚨
The IFS offers summer internships each year. Many of our permanent staff started with one of these. On Monday we're holding an online event to provide more info. Please do come/share.
ifs.org.uk/events/ifs-r...
The IFS offers summer internships each year. Many of our permanent staff started with one of these. On Monday we're holding an online event to provide more info. Please do come/share.
ifs.org.uk/events/ifs-r...
Very much one for the fiscal nerds, but important:
Bank of England analysis suggests that by pushing down yields, Quantitative Easing (QE) allowed the government to borrow on better terms, on a long term basis, producing fiscal benefits that offset at least some of the headline QE-related losses.
Bank of England analysis suggests that by pushing down yields, Quantitative Easing (QE) allowed the government to borrow on better terms, on a long term basis, producing fiscal benefits that offset at least some of the headline QE-related losses.
Bank of England pushes back on criticism of QE programme losses.
It publishes new analysis showing it cut debt issuance costs for government, resulting in fiscal savings of £50-£125 billion that it says are still being felt.
www.bankofengland.co.uk/asset-purcha...
It publishes new analysis showing it cut debt issuance costs for government, resulting in fiscal savings of £50-£125 billion that it says are still being felt.
www.bankofengland.co.uk/asset-purcha...
Asset Purchase Facility Quarterly Report - 2025 Q3
In the interests of openness and transparency, we publish a quarterly report on the transactions carried out as part of the Asset Purchase Facility. The reports are published shortly after the end of ...
www.bankofengland.co.uk
November 11, 2025 at 2:40 PM
Very much one for the fiscal nerds, but important:
Bank of England analysis suggests that by pushing down yields, Quantitative Easing (QE) allowed the government to borrow on better terms, on a long term basis, producing fiscal benefits that offset at least some of the headline QE-related losses.
Bank of England analysis suggests that by pushing down yields, Quantitative Easing (QE) allowed the government to borrow on better terms, on a long term basis, producing fiscal benefits that offset at least some of the headline QE-related losses.
An interesting piece which (rightly in my view) puts policy uncertainty front and centre. But I'm less convinced by the proposed policy prescription: if we kept a 2nd forecast, but don't formally assess rule compliance, what stops everyone else just reading off the OBR spreadsheet?
November 11, 2025 at 9:25 AM
An interesting piece which (rightly in my view) puts policy uncertainty front and centre. But I'm less convinced by the proposed policy prescription: if we kept a 2nd forecast, but don't formally assess rule compliance, what stops everyone else just reading off the OBR spreadsheet?
One reading of this remark is that the fiscal rule requiring debt to be falling as a share of GDP in 2029/30 is now the one that binds (as cuts to capital spending wouldn't help to meet her borrowing rule). That's entirely possible - and was what we predicted in the IFS Green Budget, as it happens.
Rachel Reeves lets the cat out of the (already threadbare) bag about the looming break to the manifesto:
“It would of course be possible to stick with the manifesto commitments but that would require things like deep cuts in capital spending.”
www.ft.com/content/a502...
“It would of course be possible to stick with the manifesto commitments but that would require things like deep cuts in capital spending.”
www.ft.com/content/a502...
Rachel Reeves signals she will break manifesto pledge with Budget tax rises
Chancellor hopes to win support from Labour MPs by lifting two-child benefit cap
www.ft.com
November 10, 2025 at 4:24 PM
One reading of this remark is that the fiscal rule requiring debt to be falling as a share of GDP in 2029/30 is now the one that binds (as cuts to capital spending wouldn't help to meet her borrowing rule). That's entirely possible - and was what we predicted in the IFS Green Budget, as it happens.