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Chancellor Alistair Darling at No.11 Downing Street. London, Britain - 12 Mar 2008

As usual, we’ve sifted through the Office for Budget Responsibility’s latest Economic and Fiscal Outlook, and reduced it down to six graphs, to spare you the tedium. As you might expect, the forecasts don’t diverge much from those made in March, but there are some differences of note. Among them is the addition of another year, 2020-21, to the forecast horizon. This moves our graphs forward and cuts off some of the forecasts made in the past. In general, though, I’ve retained the forecasts from the distant Budget of June 2010 – for the sake of both comparison and consistency – although, as I explained yesterday, I don’t think there’s much to be gained from focusing on them.

1. THE GROWTH CHART

These forecasts certainly don’t differ much from those made in March. The greatest change is to the OBR’s estimation of growth last year, which has risen from 2.6 per cent to 3.0 per cent. In other years, it’s a matter of 0.1 percentage points added here or 0.1 percentage points removed there.

150708 Growth

2. THE BORROWING CHART

For the second Budget in a row, Osborne has relaxed his fiscal tightening. The Government will have to keep on borrowing for one year more: the public finances will achieve surplus in 2019-20 instead of 2018-19. How convenient that one of the Chancellor’s new fiscal targets, proposed in the Budget, allows him to do just that.

150708 Borrowing

3. THE STRUCTURAL DEFICIT CHART

What about the fiscal target that Osborne announced in the last Budget, “to balance the cyclically adjusted current budget in the third year of the forecast period”? Despite the looser fiscal policy, he’s also still hitting that. The surplus that’s foreseen for 2017-18 is smaller than it was in March, but it’s there.

150708 Deficit

4. THE DEBT GRAPH

One of the happiest fiscal forecasts of the last Budget stays in this one: the OBR reckons that the Government’s debt pile, as a percentage of GDP, was at its largest last year, and will now reduce in every year of this Parliament. Yet it ought to be said that the ratio expected for 2020-21 – 68.5 per cent – is still intimidatingly high. As the OBR points out, it represents the reversal of only “around a quarter of the increase seen in the wake of the financial crisis”.

150708 Debt 1

5. THE DEBT CHART

When expressed as a cash sum, the debt pile keeps on growing – from £1.49 trillion now to £1.63 trillion in 2020-21. There is one slight blip in the forecasts, though, of a sort we haven’t seen for a long time. For one year only, 2019-20, the OBR expects the debt to go down by a full £1 billion.

150708 Debt 2

6. THE EMPLOYMENT GRAPH

The jobs boom keeps on booming:

150708 Employment

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