Public finances Defence versus welfare – the trade-off is being misrepresented Why it's important we have a clear picture of how we spent the peace dividend while it was around. 12 June 2026 by Ruth Curtice This was first published on our Substack. Defence versus welfare – the trade-off is being misrepresented The debate around where to get the money for higher defence spending from has been raging in government for some time. Ministerial resignations this week over the funding of the defence investment plan forced the issue to the top … Continued READ MORE
Public finances Three myths about UK borrowing and growth 13 May 2026 by Ruth Curtice Three myths shape debates about government borrowing and growth. First, that the cause of our growth woes is an overbearing, miserly finance ministry. Borrowing too little has just not ranked among Britain’s recent weaknesses. Debt has doubled since the financial crisis. We now pay more to borrow than any other G7 economy. Consequently, debt interest consumes more … Continued READ MORE
Budgets & fiscal events Fiscal repair and cost-of-living relief: How Reeves fared on the Budget’s twin challenges 3 December 2025 by James Smith This article was originally published on LSE Inequalities. After months of speculation and expectations (mis)management, we at last know the contents of Rachel Reeves’ second Budget. The backdrop to this event was a deteriorating economic outlook and sticky inflation, as well as stretched public finances, with political pressures from all sides. To make matters worse, there was … Continued READ MORE
Public finances Three things you need to know to communicate the public finances 29 October 2025 by Ruth Curtice Originally published by the OECD here: Three things you need to know to communicate the public finances Britain’s annual Budget isn’t until 26th November but has already been dominating headlines for months. In my former role as Fiscal Director at HM Treasury, the weeks leading up to the Budget involved the occasional late night as … Continued READ MORE
Budgets & fiscal events· Public finances How should the Chancellor escape her headroom bind? 14 March 2025 by Ruth Curtice and Imogen Stone and Tom Clark It is only four months since Rachel Reeves ‘shocked’ Britain by doing what every Chancellor does after an election – jacking up taxes. We have now been told the Government will make the “politically difficult” choice to cut welfare. It is safe to say that no political choices are walks in the park. The “bravest” … Continued READ MORE
Budgets & fiscal events· Public finances Turbulent times How should the Chancellor respond to recent movements in the gilt market? 10 January 2025 by Emily Fry and Cara Pacitti Turbulent gilt markets, a devaluing pound and speculation about the Office for Budget Responsibility (OBR) downgrading its economic forecasts is not the start to 2025 the Chancellor was hoping for. What is causing all the fuss? On 9 January, the UK 10-year gilt yield closed at 4.8 per cent, up from 4.58 per cent just … Continued READ MORE
Public finances They’ve only just begun… Government fires the starting gun on a Spending Review that must plot a path to prosperity 10 December 2024 by James Smith and Tom Clark Rachel Reeves certainly isn’t the first Chancellor to turn to financiers for line-by-line scrutiny of public expenditure, as she is reported to be doing, as she fires the starting gun on next Spring’s Spending Review. Back in 1931, Philip Snowden turned to Sir George May – a retired “man from the Pru” – to identify … Continued READ MORE
Public finances Austerity doesn’t just damage public services, it destroys faith in the future Britain can’t afford the tax cuts announced in the budget 17 March 2024 by Torsten Bell As the dust settles on the budget, it’s time to reflect on the real task facing anyone trying to govern Britain. The tax cuts announced are paid for with big spending cuts to come: unprotected departments (like councils and prisons) face 13% (£19bn) cuts by 2028-29. Most people think delivering them is impossible, because they’ve seen the … Continued READ MORE
Budgets & fiscal events· Public finances Cutting back on the investment and delivery of public services is not what the economy needs – or what the electorate wants 27 February 2024 by James Smith and Tara Goatley The Government’s current plans for post-election cuts to public spending look undeliverable given rising prices and increasing demand on services. As discussed below, plans to cap day-to-day spending increases at 1 per cent (after allowing for inflation) imply very big cuts to departments not covered by existing spending commitments. This is particularly worrying given pre-existing … Continued READ MORE
Public finances· Growth· Net zero What Britain should learn from Biden’s Inflation Reduction Act plan Like or loath the ‘protectionist’ Inflation Reduction Act’s green subsidies, America offers an example of strategic thinking 13 March 2023 by Torsten Bell The UK has lost the habit of thinking strategically. Grappling with the constraints imposed by the global and domestic economies — or reality as it is sometimes known — is deeply out of fashion these days. Debates on how the UK might respond to Joe Biden’s Inflation Reduction Act and its near $400bn of green … Continued READ MORE
Budgets & fiscal events This Budget will leave the poorest households hundreds of pounds a year worse off Families across Britain should expect a bumpy ride over the next six months 2 November 2021 by Mike Brewer Having spent the first 18 months in the job delivering Covid crisis fiscal statements, you can understand why there was a celebratory vibe to the Chancellor’s first “post-crisis” Budget today. The Government’s official economic watchdog, the OBR, came to the party laden with gifts – including a major upgrade to economic growth and a £141 … Continued READ MORE
Budgets & fiscal events· Tax Low tax conservatism is dead, but fiscal conservatism is back in fashion 13 September 2021 by Torsten Bell The Prime Minister and Chancellor made huge policy decisions this week, raising taxes to spend more on the NHS and protect the assets of those facing high social care costs. But the tsunami of announcements can also hide the biggest decisions they’ve taken: to bury the idea of low tax conservatism but resurrect, after a … Continued READ MORE
Public finances· Tax· Covid-19 Fiscal multi-tasking 12 November 2020 by Torsten Bell Multi-tasking can be hard. Ask any parent that survived lockdown by combining work with something resembling home schooling. But it’s also a fact of life, so the trick is to manage multiple objectives well, not wish them away. This is true for people and our Government. Indeed, fiscal multi-tasking is what the 2020s are all … Continued READ MORE
Budgets & fiscal events· Public finances· Covid-19 Sunak’s crisis-fighting measures: time to scale up? The Chancellor’s policy announcements are generating wide discussion but are the sums commensurate with the depth of the downturn? 13 July 2020 by James Smith This week the Chancellor Rishi Sunak unveiled his “Summer Economic Update.” In case it’s not clear, this wasn’t technically a Budget. That said, it still contained more policy than all but three of the fiscal events we’ve had since the onset of the financial crisis more than a decade ago. So, it was a big … Continued READ MORE
Budgets & fiscal events· Social security Coronavirus and the benefits system: What support is available? 9 March 2020 by Karl Handscomb With the continuing increase in coronavirus cases, much of the current debate has rightly focused on Statutory Sick Pay (SSP). The Government’s announcement to extend SSP to day one of absence is welcome, but low earners and the self-employed are not entitled to SSP. This poses a challenge for protecting family incomes from the spread … Continued READ MORE
Public finances· Macroeconomic policy· Political parties and elections Political leaders must set out credible plans to tackle the next downturn The time for action on macroeconomic policy is now 30 November 2019 by James Smith Okay, fair enough, there’s a lot going on right now. With a fraught election campaign in full flow, and our future relationship with the EU still up in the air, you can be forgiven for taking your eye off preparations for the next recession. But boom and bust hasn’t gone away. So while the sun … Continued READ MORE
Public finances· Macroeconomic policy The Treasury and Bank of England should prepare for a three-pronged economic shock from ‘no deal’ 1 October 2019 by Jack Leslie It’s a well-worn trope that no one knows what the economic impact of a no deal Brexit would be. And for good reason. The scale of disruption at the border, in supply chains and in the wider economy, is impossible to predict with any accuracy. Much would depend on the timing and the success of … Continued READ MORE
Public finances· Macroeconomic policy Another summer blockbuster (on fiscal risks) from the OBR 18 July 2019 by Richard Hughes Today the OBR published its second Fiscal Risks Report, a comprehensive assessment of all the things that could go wrong with the UK’s public finances over the next 50 years. And it is a summer blockbuster – topping out at 293 pages in total. Fiscal risk analysis is the new cutting edge in fiscal policymaking, … Continued READ MORE
Public finances Phil ‘Bullseye’ Hammond told MPs what they ‘could’ve won’ – if only they didn’t stuff up Brexit 14 March 2019 by Torsten Bell Last night Parliamentarians went all Noel Edmonds as they debated deal or no deal. But earlier in the day it was the late, great Jim Bowen of Bullseye fame that the Chancellor was channelling in his Spring Statement, setting out just what MP’s “could’ve won” – or might still win – if they back a … Continued READ MORE
Budgets & fiscal events· Incomes· Inequality & poverty· Public finances Is rising inequality helping to swell the coffers for Fortunate Phil? 12 March 2019 by Torsten Bell 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 READ MORE
Incomes· Public finances As growth slows UK households have already taken a £1,500 living standards hit since the referendum 11 February 2019 by Torsten Bell Today we learnt that economic growth slowed significantly at the end of 2018, with GDP only growing by 0.2 per cent in the last three months of the year. This is around a third of the pre-crisis average rate. In December alone, the economy contracted by 0.4 per cent with the manufacturing sector now having … Continued READ MORE
Budgets & fiscal events· Public finances Hitting the books: student loans and the public finances 16 December 2018 by Matthew Whittaker 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 READ MORE
Budgets & fiscal events· Public finances Pessimism, Politics and Economics: the real Budget story 2 November 2018 by James Smith 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 READ MORE
Budgets & fiscal events· Work Never mind the end of austerity, what about the end of low pay? 2 November 2018 by Conor D’Arcy While post-Budget debates on austerity and tax cuts rumble on, one clear living standards win on Monday was an increase in the National Living Wage (NLW). But beyond announcing the rate for next year, the government also used the Budget to set out a bold new aspiration that could have major implications: ending low pay. … Continued READ MORE
Budgets & fiscal events· Public finances The Budget marks a very significant easing – but not an end of austerity 30 October 2018 by Torsten Bell 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 READ MORE
