Key findings

  • Wednesday’s Budget may be a little light on big policy announcements – particularly following the decision not to press ahead with pension tax relief reform. But the fiscal projections provided by the OBR will be watched with interest: even relatively small changes in the underlying economic outlook could threaten the fiscal mandate.
  • Any deterioration in the medium-term outlook will leave the Chancellor with difficult choices. If the revision is sizeable enough, he will face the prospect of being adjudged as being off course on his fiscal mandate of achieving a surplus in 2019-20. But even if the adjustment is more modest, he is likely to want to take action in order to maintain a buffer against inevitable in-year movements in borrowing over the course of the parliament – otherwise he faces the risk of needing to implement in-year spending cuts in the run-up to the next election.
  • He has already announced that the changing economic backdrop means that he will be implementing further spending cuts in the order of £4 billion on Wednesday. We may hear about plans for tax rises too.
  • Given this context, the need to find an additional £5 billion to fund pre-election tax cut pledges appears unreasonable. We hope that he chooses to cancel these highly regressive promises – instead diverting funds back into supporting lower income working households via UC.

Further reading

More, more, more
Putting the Autumn Budget 2024 decisions on tax, spending and borrowing into context
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Camron Aref-Adib, Mike Brewer, Molly Broome, Tom Clark, Alex Clegg, Nye Cominetti, Adam Corlett, Emily Fry, Sophie Hale, Lindsay Judge, Zachary Leather, Jonathan Marshall, Charlie McCurdy, Louise Murphy, Felicia Odamtten, Cara Pacitti, Simon Pittaway, Hannah Slaughter, James Smith, Greg Thwaites, Lalitha Try
Great expectations in hard times?
Previewing the big decisions for the Chancellor in the new Government’s first Budget
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Emily Fry, Cara Pacitti, James Smith
Revenue and reform
What tax changes could – and should – we see in Autumn Budget 2024?
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Adam Corlett
Stephen Clarke
Stephen Clarke
David Finch
David Finch
Matthew Whittaker
Matthew Whittaker