Nick Ridpath
@nickridpath.bsky.social
Research Economist at the IFS
New ONS public finance data today shows central government revenues are still lagging significantly below March expectations.
Given inflation has been higher than forecast, this is surprising - even VAT receipts, which one might expect to rise with inflation, are below forecast
Given inflation has been higher than forecast, this is surprising - even VAT receipts, which one might expect to rise with inflation, are below forecast
December 19, 2025 at 2:39 PM
New ONS public finance data today shows central government revenues are still lagging significantly below March expectations.
Given inflation has been higher than forecast, this is surprising - even VAT receipts, which one might expect to rise with inflation, are below forecast
Given inflation has been higher than forecast, this is surprising - even VAT receipts, which one might expect to rise with inflation, are below forecast
The government has a second fiscal rule, the debt rule, which is more volatile, with no plans for a range. Here, the chances of surviving are even slimmer – the £15bn the government had in Spring would be v unlikely to survive for three years.
October 16, 2025 at 6:56 AM
The government has a second fiscal rule, the debt rule, which is more volatile, with no plans for a range. Here, the chances of surviving are even slimmer – the £15bn the government had in Spring would be v unlikely to survive for three years.
To hold up over a longer timeframe, such as 3 years, the Chancellor would need far more headroom: £9.9bn would only give a 1 in 4 chance of avoiding further changes. To get above 50%, she’d need around £50bn, around the levels maintained in 2013 & 2014.
October 16, 2025 at 6:56 AM
To hold up over a longer timeframe, such as 3 years, the Chancellor would need far more headroom: £9.9bn would only give a 1 in 4 chance of avoiding further changes. To get above 50%, she’d need around £50bn, around the levels maintained in 2013 & 2014.
Now, from 2027, there will be a range of 0.5% of GDP on the borrowing rule in the Spring, so it binds less tightly. If this were brought forward, it would improve the Chancellor’s chances of not needing further changes to over 80%. But we might want to avoid volatility for longer than six months…
October 16, 2025 at 6:55 AM
Now, from 2027, there will be a range of 0.5% of GDP on the borrowing rule in the Spring, so it binds less tightly. If this were brought forward, it would improve the Chancellor’s chances of not needing further changes to over 80%. But we might want to avoid volatility for longer than six months…
We looked at past revisions to the OBR forecast, and what proportion of them the Chancellor would survive without being bounced into further changes – we find that to withstand 80% of past shocks, she would need around £26 billion of headroom.
October 16, 2025 at 6:54 AM
We looked at past revisions to the OBR forecast, and what proportion of them the Chancellor would survive without being bounced into further changes – we find that to withstand 80% of past shocks, she would need around £26 billion of headroom.
With a fiscal “groundhog day” of discussions about how the Chancellor could keep meeting her fiscal rules for the second time this year, we were wondering: what are the chances we could be doing all this again in Spring? The answer: pretty high. Particularly nerdy thread:
October 16, 2025 at 6:54 AM
With a fiscal “groundhog day” of discussions about how the Chancellor could keep meeting her fiscal rules for the second time this year, we were wondering: what are the chances we could be doing all this again in Spring? The answer: pretty high. Particularly nerdy thread: