To spare you from wading through the Office for Budget Responsibility’s latest Economic and Fiscal Outlook that accompanies the Autumn Statement, here are five graphs that sum up some of its key forecasts. The graphs compare today’s forecasts with those made at the last Budget and then those made in George Osborne’s first Budget in June 2010 (leaving blank spaces where no forecasts were made). I’ve added brief comments to each, but the overall theme is: improvements from the last Budget, but we’re still far from the optimistic forecasts that the OBR made back in 2010.
1. THE GROWTH CHART. No surprise here, the OBR has upgraded its growth forecasts for this year and next. Specifically, it reckons that the economy will grow by 1.4 per cent this year – more than double the 0.6 per cent prediction made in March – and by 2.4 per cent in 2014.
2. THE BORROWING CHART. This is the one, aside from growth, that Osborne made the most of – and that’s replicated on the OBR homepage. Now that they’ve added a forecast for the financial year 2018-19, they’re able to say when, if all goes to plan, the budget will be back in balance. Of course, the June 2010 Budget suggested that balance would be achieved a year or two earlier.
3. THE STRUCTURAL DEFICIT CHART. This, the cyclically-adjusted current budget, is what Osborne generally means when he talks about cutting the deficit. It’s basically that part of the deficit that would remain even if the economy were in peak condition. Which helps explain why its position hasn’t improved with the growth forecasts. If anything, it’s going to take us slightly longer to reach a surplus than forecast in the March Budget.
4. THE DEBT GRAPH. Aka, the scary graph. It may be a little less scary than in March, but an expected peak debt of 80 per cent of GDP is still pretty hair-raising. Of course, Osborne was already missing his original target to have debt declining as a percentage of GDP by 2015, and that hasn’t changed:
5. THE EMPLOYMENT GRAPH. Strikingly, the employment line has lost the plateau that developed in the last set of forecasts – it’s now making upwards progress throughout this year and beyond.