Alfie Stirling
@alfie-stirling.bsky.social
Director of Insight & Policy and Chief Economist at JRF | previously NEF & IPPR | "all models are wrong, but some are useful" (G Box)
When you adjust for these things, it more than wipes out rising incomes under the government's measure.
The danger is that the Chancellor's numbers won't reflect the lived experience of families.
You can't buy food with imputed rent, and you can't just stop paying your rent or mortgage.
The danger is that the Chancellor's numbers won't reflect the lived experience of families.
You can't buy food with imputed rent, and you can't just stop paying your rent or mortgage.
March 26, 2025 at 6:34 PM
When you adjust for these things, it more than wipes out rising incomes under the government's measure.
The danger is that the Chancellor's numbers won't reflect the lived experience of families.
You can't buy food with imputed rent, and you can't just stop paying your rent or mortgage.
The danger is that the Chancellor's numbers won't reflect the lived experience of families.
You can't buy food with imputed rent, and you can't just stop paying your rent or mortgage.
Key differences are the Chancellor's figure:
1. Is gross of housing costs, even though these are rising fast in OBR forecast.
2. Treats 'imputed rent' - what homeowners would get *if* they rented out their home - as income.
3. Adjusts for people not families, when child population is falling
1. Is gross of housing costs, even though these are rising fast in OBR forecast.
2. Treats 'imputed rent' - what homeowners would get *if* they rented out their home - as income.
3. Adjusts for people not families, when child population is falling
March 26, 2025 at 6:34 PM
Key differences are the Chancellor's figure:
1. Is gross of housing costs, even though these are rising fast in OBR forecast.
2. Treats 'imputed rent' - what homeowners would get *if* they rented out their home - as income.
3. Adjusts for people not families, when child population is falling
1. Is gross of housing costs, even though these are rising fast in OBR forecast.
2. Treats 'imputed rent' - what homeowners would get *if* they rented out their home - as income.
3. Adjusts for people not families, when child population is falling
But why did the Treasury say households will be £500/yr better off?
They are using a 'national accounts' measure for income that is not designed to capture living standards.
We are using the data government produces specifically to look at disposable incomes, after housing costs.
They are using a 'national accounts' measure for income that is not designed to capture living standards.
We are using the data government produces specifically to look at disposable incomes, after housing costs.
March 26, 2025 at 6:34 PM
But why did the Treasury say households will be £500/yr better off?
They are using a 'national accounts' measure for income that is not designed to capture living standards.
We are using the data government produces specifically to look at disposable incomes, after housing costs.
They are using a 'national accounts' measure for income that is not designed to capture living standards.
We are using the data government produces specifically to look at disposable incomes, after housing costs.
Not everyone is affected equally.
The poorest third could see their incomes fall around twice as fast compared with the middle and the top, 2025-30.
They are disproportionately effected by job losses, rising housing costs and falling real benefit income, including cuts to disability benefits.
The poorest third could see their incomes fall around twice as fast compared with the middle and the top, 2025-30.
They are disproportionately effected by job losses, rising housing costs and falling real benefit income, including cuts to disability benefits.
March 26, 2025 at 6:34 PM
Not everyone is affected equally.
The poorest third could see their incomes fall around twice as fast compared with the middle and the top, 2025-30.
They are disproportionately effected by job losses, rising housing costs and falling real benefit income, including cuts to disability benefits.
The poorest third could see their incomes fall around twice as fast compared with the middle and the top, 2025-30.
They are disproportionately effected by job losses, rising housing costs and falling real benefit income, including cuts to disability benefits.
The main drivers are threefold.
1. Interest rates are high (up on Oct forecast), increasing unemployment and feeding through to higher housing costs.
2. Inflation (also forecast to be higher in the near-term) reducing real earnings growth.
3. Frozen tax thresholds sees % tax in earnings rise.
1. Interest rates are high (up on Oct forecast), increasing unemployment and feeding through to higher housing costs.
2. Inflation (also forecast to be higher in the near-term) reducing real earnings growth.
3. Frozen tax thresholds sees % tax in earnings rise.
March 26, 2025 at 6:34 PM
The main drivers are threefold.
1. Interest rates are high (up on Oct forecast), increasing unemployment and feeding through to higher housing costs.
2. Inflation (also forecast to be higher in the near-term) reducing real earnings growth.
3. Frozen tax thresholds sees % tax in earnings rise.
1. Interest rates are high (up on Oct forecast), increasing unemployment and feeding through to higher housing costs.
2. Inflation (also forecast to be higher in the near-term) reducing real earnings growth.
3. Frozen tax thresholds sees % tax in earnings rise.
NEW from @jrf-uk.bsky.social
Much has been made of the pressure on public finances.
Household finances remain the elephant in the room.
If OBR adjust their Mar forecast in line with the BoE in Feb, it will see the average family £1,400/yr worse off by 2030, compared with today.
Thread.
Much has been made of the pressure on public finances.
Household finances remain the elephant in the room.
If OBR adjust their Mar forecast in line with the BoE in Feb, it will see the average family £1,400/yr worse off by 2030, compared with today.
Thread.
March 23, 2025 at 8:01 AM
For more, see the Observer online now/print tomorrow for an exclusive writeup.
@jrf-uk.bsky.social full report coming shortly.
And look out for the update of this analysis on Wednesday, with the latest forecasts. www.theguardian.com/uk-news/2025...
@jrf-uk.bsky.social full report coming shortly.
And look out for the update of this analysis on Wednesday, with the latest forecasts. www.theguardian.com/uk-news/2025...
March 22, 2025 at 9:02 PM
For more, see the Observer online now/print tomorrow for an exclusive writeup.
@jrf-uk.bsky.social full report coming shortly.
And look out for the update of this analysis on Wednesday, with the latest forecasts. www.theguardian.com/uk-news/2025...
@jrf-uk.bsky.social full report coming shortly.
And look out for the update of this analysis on Wednesday, with the latest forecasts. www.theguardian.com/uk-news/2025...
It would take a brave government to stand on that record in 2029.
March 22, 2025 at 9:02 PM
It would take a brave government to stand on that record in 2029.
But if it doesn't, it will put this parliament at risk of being the first on modern record (since 1955) to see falling living standards from start to finish, by the OBR's main measure.
(this chart is from @resfoundation.bsky.social)
(this chart is from @resfoundation.bsky.social)
March 22, 2025 at 9:02 PM
But if it doesn't, it will put this parliament at risk of being the first on modern record (since 1955) to see falling living standards from start to finish, by the OBR's main measure.
(this chart is from @resfoundation.bsky.social)
(this chart is from @resfoundation.bsky.social)