Torsten Bell

Is rising inequality helping to swell the coffers for Fortunate Phil?

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Fortunate Phil is not what the Chancellor generally gets called. But as he prepares for tomorrow’s Spring Statement, Philip Hammond – despite facing what looks like headline bad news – has at least some reasons to be grateful for good luck on both the economic and political fronts. The Treasury is gearing up for the … Continued

Matthew Whittaker

Hitting the books: student loans and the public finances

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With everything that’s going on in British politics right now, it’s easy to forget that the government was celebrating some seriously good news just seven weeks ago. You might remember that the Chancellor got handed a £74 billion fiscal windfall at the Budget that allowed him to deliver the long-promised extra spending on the NHS … Continued

James Smith

Pessimism, Politics and Economics: the real Budget story

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Debates following this week’s Budget have been dominated by political arguments about whether the Chancellor’s spending splurge means that austerity had been ended or lives on (our view: austerity was significantly eased but not ended). But another debate has been conspicuously absent this week, having dominated the UK’s political economy for the past eight years: … Continued

Torsten Bell

The Budget marks a very significant easing – but not an end of austerity

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Marriages require compromise. So we shouldn’t be surprised that the reluctant political marriage between Theresa May and Phillip Hammond has delivered a compromise Budget. Caught between the Prime Ministers promise to “end austerity”, the wish to see debt falling, and the reality of the parliamentary arithmetic making significant tax rises difficult the Chancellor has taken … Continued

The Chancellor may have one arm tied behind his back, but there are still tax levers he can pull

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How can a government with a tenuous majority, an intra-party feud and Brexit uncertainty find the money to ‘end austerity’ on top of more than £20 billion a year it has promised for the NHS? The safe bet is that it won’t find anywhere near all of it in the Budget. This can – like … Continued

James Smith

The OBR on Brexit: known-unknowns and unknown-unknowns cast shadow over the Budget

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As if Philip Hammond’s job over the next few weeks wasn’t tough enough already, the Office for Budget Responsibility (OBR) this morning has published its thinking on how Brexit will make his life harder for many years to come. Already charged with “ending austerity” (which, as Torsten pointed out last week, is a stretch to … Continued

Matthew Whittaker

Is there enough fuel in the fiscal tank for another duty freeze?

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After eight years of freezes, it had started to look like successive governments’ cancellation of the annual RPI-linked uprating of fuel duty had run out of road. After all, it’s already costing the government around £9 billion a year, and that cost will grow with each passing year. But we now know that the Chancellor … Continued

Matthew Whittaker

Five charts to chill the Chancellor’s blood ahead of the Budget

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We now know that this year’s Budget will be delivered on 29 October, making it the first Monday Budget since 1962. The traditional Wednesday has been avoided, we’re told, to side-step negative Halloween-based headlines. Yet there’s still plenty of scary stuff for the Chancellor to deal with – from finding the £20 billion needed to … Continued

Torsten Bell

What Philip Hammond will say today: the deficit is dead, long live the debt

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Philip Hammond is going to give a very short speech at the Spring Statement today. There will be none of the tax and spending announcements we are used to when Chancellors rise to the Despatch Box. But short and largely announcement free as it will be, tomorrow’s speech will nonetheless represent something very significant for … Continued

Should the Office for Budget Responsibility also forecast inequality?

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The strengths and weaknesses of economic forecasting are under scrutiny, perhaps like never before. How might GDP perform under different Brexit policies compared to a world with no Brexit? Is unemployment now likely to rise or fall? What will public borrowing in 2022 be? Whatever your politics, such modelling and forecasting is indispensable – so … Continued

Torsten Bell

The Chancellor has coped with a huge economic downgrade, but the outlook is grim for families across Britain

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For his first Autumn Budget, the Office for Budget Responsibility has given Philip Hammond a truly catastrophic set of economic forecasts. After a decade of unrealised productivity forecasts, the OBR has now delivered the mother of all downgrades; all but halving its view of the UK’s capacity to grow. As a result it now expects … Continued

The Autumn Budget 2017 brings worse than hoped for news for the low paid

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or many people, the big news out of November’s Budget – a massive downgrade in the outlook for productivity growth – will sound a bit abstract. The productivity downgrade has made the Chancellor’s task of balancing the books harder. But its impact on pay – with average annual earnings lowered by £1,000 – mean it’s even … Continued

Torsten Bell

It’s time to stop feeling sorry for the Chancellor – there’s no excuse for a do nothing Budget

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It’s all the rage to feel sorry for Britain’s Chancellor of the Exchequer. Philip Hammond is an unlucky man we’re told, having to prepare a Budget against a backdrop of a weaker economy, worse public finances and pressure to relaunch a government that’s had a tough Autumn. Those pressures are real, and no-one’s doubting that … Continued

Matthew Whittaker

Hammond’s goal in this Budget should be to restart the productivity engine

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As a nation, we’re working smarter than we used to. A decade ago, for every hour we worked, we produced about £31.30 of stuff; today each hour of graft generates £31.85 of output. That sounds like good news. If we’re becoming more productive we should be able to treat ourselves to a pay rise, or … Continued

Torsten Bell

All gain, no pain? – the Chancellor’s cunning tax plan

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British politics is odd these days. But even by current standards something very unusual looks set to happen in next week’s Budget. A basic rule of British politics is that tax rises tend to happen soon after a general election, with the Chancellor betting that we’ll all have forgotten about them when the next election … Continued

How Philip Hammond can strike a blow for intergenerational fairness in his Budget

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With the dust beginning to settle on a scandal-focused fortnight in Westminster politics, attention is turning back to the big event looming on the horizon – Philip Hammond’s first Autumn Budget in 12 days’ time. The backdrop looks challenging, with the Chancellor having to deal with the headache of a likely downgrade to the economic … Continued

Torsten Bell

Strictly Come Building: How housing can make a star turn in the upcoming Budget

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Lowering expectations ahead of a Budget always helps a Chancellor. And when it comes to expectations of Cabinet members, Boris Johnson and Priti Patel have definitely been in the lowering business. But others have made the Chancellor’s task harder rather than easier. Robert Chote, the chair of the Office for Budget Responsibility, is set to … Continued

Let it go Chancellor. Why Philip Hammond should revisit the benefit freeze in next month’s Budget

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The weather might be un-seasonally warm just now, but millions of household budgets are in the grip of a four-year freeze that’s about to get colder still. For decades, the government’s default position has been to uprate the value of working-age benefits each April in line with the rate of inflation prevailing in the previous … Continued

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