An interesting piece which (rightly in my view) puts policy uncertainty front and centre. But I'm less convinced by the proposed policy prescription: if we kept a 2nd forecast, but don't formally assess rule compliance, what stops everyone else just reading off the OBR spreadsheet?
November 11, 2025 at 9:25 AM
An interesting piece which (rightly in my view) puts policy uncertainty front and centre. But I'm less convinced by the proposed policy prescription: if we kept a 2nd forecast, but don't formally assess rule compliance, what stops everyone else just reading off the OBR spreadsheet?
One reading of this remark is that the fiscal rule requiring debt to be falling as a share of GDP in 2029/30 is now the one that binds (as cuts to capital spending wouldn't help to meet her borrowing rule). That's entirely possible - and was what we predicted in the IFS Green Budget, as it happens.
Rachel Reeves lets the cat out of the (already threadbare) bag about the looming break to the manifesto:
“It would of course be possible to stick with the manifesto commitments but that would require things like deep cuts in capital spending.”
www.ft.com/content/a502...
“It would of course be possible to stick with the manifesto commitments but that would require things like deep cuts in capital spending.”
www.ft.com/content/a502...
Rachel Reeves signals she will break manifesto pledge with Budget tax rises
Chancellor hopes to win support from Labour MPs by lifting two-child benefit cap
www.ft.com
November 10, 2025 at 4:24 PM
One reading of this remark is that the fiscal rule requiring debt to be falling as a share of GDP in 2029/30 is now the one that binds (as cuts to capital spending wouldn't help to meet her borrowing rule). That's entirely possible - and was what we predicted in the IFS Green Budget, as it happens.
Great to see @tomcalver.bsky.social using this IFS chart in his (excellent) piece about the UK's economic and fiscal travails. The combination of low growth and high debt interest really does make for some unpleasant fiscal arithmetic. It's a tough time to be Chancellor.
November 9, 2025 at 4:33 PM
Great to see @tomcalver.bsky.social using this IFS chart in his (excellent) piece about the UK's economic and fiscal travails. The combination of low growth and high debt interest really does make for some unpleasant fiscal arithmetic. It's a tough time to be Chancellor.
For this week's @theobserveruk.bsky.social I've written about one of my favourite topics: the productivity of the public sector, how it's measured, why it tends to grow less quickly than productivity in the private sector, and what it means for policy.
observer.co.uk/news/busines...
observer.co.uk/news/busines...
November 9, 2025 at 10:11 AM
For this week's @theobserveruk.bsky.social I've written about one of my favourite topics: the productivity of the public sector, how it's measured, why it tends to grow less quickly than productivity in the private sector, and what it means for policy.
observer.co.uk/news/busines...
observer.co.uk/news/busines...
Why not ease into the weekend with a 45 minute discussion of the UK's VAT system?
VAT is a good tax in principle, but our system is riddled with oddities and inconsistencies which reshape the prices we pay in the shops and the economy we get. We could do better.
VAT is a good tax in principle, but our system is riddled with oddities and inconsistencies which reshape the prices we pay in the shops and the economy we get. We could do better.
NEW PODCAST: How to fix VAT
Why is chocolate-covered shortbread taxed differently from plain? In the final episode of our tax mini-series, we unpack what makes the UK’s VAT system so complex, inefficient and unfair.
🎧 Listen here: ifs.org.uk/articles/how...
Why is chocolate-covered shortbread taxed differently from plain? In the final episode of our tax mini-series, we unpack what makes the UK’s VAT system so complex, inefficient and unfair.
🎧 Listen here: ifs.org.uk/articles/how...
November 7, 2025 at 10:44 AM
Why not ease into the weekend with a 45 minute discussion of the UK's VAT system?
VAT is a good tax in principle, but our system is riddled with oddities and inconsistencies which reshape the prices we pay in the shops and the economy we get. We could do better.
VAT is a good tax in principle, but our system is riddled with oddities and inconsistencies which reshape the prices we pay in the shops and the economy we get. We could do better.
Reposted by Ben Zaranko
The IFS has calculated that the effective carbon price on household use of gas is negative, thanks to its lower VAT rate.
ifs.org.uk/articles/tax....
This obviously sets back the carbon transition. Let's hope the Government is looking to make this better!
ifs.org.uk/articles/tax....
This obviously sets back the carbon transition. Let's hope the Government is looking to make this better!
November 5, 2025 at 10:55 AM
The IFS has calculated that the effective carbon price on household use of gas is negative, thanks to its lower VAT rate.
ifs.org.uk/articles/tax....
This obviously sets back the carbon transition. Let's hope the Government is looking to make this better!
ifs.org.uk/articles/tax....
This obviously sets back the carbon transition. Let's hope the Government is looking to make this better!
Lots of hints in Rachel Reeves' speech (e.g. at broad-based tax rises, a chunky OBR productivity downgrade, an increase in headroom) but nothing concrete. It was largely a scene-setting and blame-shifting exercise. Until we see the detail on 26 November, there's not much we can say.
November 4, 2025 at 8:48 AM
Lots of hints in Rachel Reeves' speech (e.g. at broad-based tax rises, a chunky OBR productivity downgrade, an increase in headroom) but nothing concrete. It was largely a scene-setting and blame-shifting exercise. Until we see the detail on 26 November, there's not much we can say.
Reposted by Ben Zaranko
🚨 OUT NOW 🚨 Does the OBR really run Britain?
💼 Former chancellor Jeremy Hunt, Labour MP @jeevunsandher.bsky.social, and the IFS's @benzaranko.bsky.social join @alaintolhurst.bsky.social to discuss whether the Office for Budget Responsibility is too powerful
🎧 Listen now: pod.fo/e/347deb
💼 Former chancellor Jeremy Hunt, Labour MP @jeevunsandher.bsky.social, and the IFS's @benzaranko.bsky.social join @alaintolhurst.bsky.social to discuss whether the Office for Budget Responsibility is too powerful
🎧 Listen now: pod.fo/e/347deb
October 31, 2025 at 11:28 AM
🚨 OUT NOW 🚨 Does the OBR really run Britain?
💼 Former chancellor Jeremy Hunt, Labour MP @jeevunsandher.bsky.social, and the IFS's @benzaranko.bsky.social join @alaintolhurst.bsky.social to discuss whether the Office for Budget Responsibility is too powerful
🎧 Listen now: pod.fo/e/347deb
💼 Former chancellor Jeremy Hunt, Labour MP @jeevunsandher.bsky.social, and the IFS's @benzaranko.bsky.social join @alaintolhurst.bsky.social to discuss whether the Office for Budget Responsibility is too powerful
🎧 Listen now: pod.fo/e/347deb
What's that, you say? You want another long, nerdy podcast about an antiquated part of the UK tax system that desperately needs reform? You're in luck
NEW PODCAST: How to fix property taxes
@helenmiller.bsky.social, Stuart Adam and @benzaranko.bsky.social explore how council tax, stamp duty and other property taxes work in the UK, what’s gone wrong, and how they could be made fairer and more efficient.
🎧 Listen here: ifs.org.uk/articles/how...
@helenmiller.bsky.social, Stuart Adam and @benzaranko.bsky.social explore how council tax, stamp duty and other property taxes work in the UK, what’s gone wrong, and how they could be made fairer and more efficient.
🎧 Listen here: ifs.org.uk/articles/how...
October 30, 2025 at 4:45 PM
What's that, you say? You want another long, nerdy podcast about an antiquated part of the UK tax system that desperately needs reform? You're in luck
We're giving the people what they want: more than an hour of content about how we could better tax wealth in the UK.
Do listen/watch and let us know what you think.
Do listen/watch and let us know what you think.
NEW PODCAST: How to fix wealth taxes
@helenmiller.bsky.social, Stuart Adam and @benzaranko.bsky.social unpack how the UK taxes savings, capital gains and wealth, and ask what a fair, efficient system would look like, in our new IFS Zooms In episode.
🎧 Listen here: ifs.org.uk/articles/how...
@helenmiller.bsky.social, Stuart Adam and @benzaranko.bsky.social unpack how the UK taxes savings, capital gains and wealth, and ask what a fair, efficient system would look like, in our new IFS Zooms In episode.
🎧 Listen here: ifs.org.uk/articles/how...
October 28, 2025 at 1:02 PM
We're giving the people what they want: more than an hour of content about how we could better tax wealth in the UK.
Do listen/watch and let us know what you think.
Do listen/watch and let us know what you think.
Rachel Reeves is about to get bitten by the productivity hedgehog. A bigger-than-expected OBR downgrade means a bigger-than-expected consolidation will be needed to meet the fiscal rules. Makes it harder to honour manifesto tax promises, and harder to build in more ‘headroom’.
October 27, 2025 at 7:04 PM
Rachel Reeves is about to get bitten by the productivity hedgehog. A bigger-than-expected OBR downgrade means a bigger-than-expected consolidation will be needed to meet the fiscal rules. Makes it harder to honour manifesto tax promises, and harder to build in more ‘headroom’.
The Conservatives’ “golden economic rule” requires that for every pound of spending cuts, at least half goes towards reducing borrowing. That’s an overly rigid policy rule. I can also imagine scenarios where it makes tax rises more likely - which presumably wasn't the intention.
October 27, 2025 at 9:16 AM
The Conservatives’ “golden economic rule” requires that for every pound of spending cuts, at least half goes towards reducing borrowing. That’s an overly rigid policy rule. I can also imagine scenarios where it makes tax rises more likely - which presumably wasn't the intention.
I've written for @theobserveruk.bsky.social about Kemi Badenoch's "golden economic rule" and Nigel Farage's promise that a Reform government would "never borrow to spend". I doubt either policy would survive contact with the real world.
You can read here: observer.co.uk/news/opinion...
You can read here: observer.co.uk/news/opinion...
Badenoch and Farage should stop making rules they can’t keep
The leaders’ new ‘golden rules’ for the economy are clumsy, inflexible and unnecessarily restrictive
observer.co.uk
October 26, 2025 at 2:31 PM
I've written for @theobserveruk.bsky.social about Kemi Badenoch's "golden economic rule" and Nigel Farage's promise that a Reform government would "never borrow to spend". I doubt either policy would survive contact with the real world.
You can read here: observer.co.uk/news/opinion...
You can read here: observer.co.uk/news/opinion...
Not the world's most sophisticated piece of analysis, but extrapolating lacklustre NHS improvements since last year's election suggests the government's waiting time targets won't be met.
(Max wants me to point out that he has also done some sophisticated analysis ifs.org.uk/publications...)
(Max wants me to point out that he has also done some sophisticated analysis ifs.org.uk/publications...)
Elective waiting times in the NHS have improved since Labour came to office, but relatively slowly. Improvements in 18 week performance will have to pick up speed considerably if the government are to hit their headline NHS target by the end of the parliament.
October 24, 2025 at 1:38 PM
Not the world's most sophisticated piece of analysis, but extrapolating lacklustre NHS improvements since last year's election suggests the government's waiting time targets won't be met.
(Max wants me to point out that he has also done some sophisticated analysis ifs.org.uk/publications...)
(Max wants me to point out that he has also done some sophisticated analysis ifs.org.uk/publications...)
I always enjoy reading Simon's thoughts, but I think this misses two big things.
1) What this thermostat analogy misses is that the act of constantly fiddling with the dial (volatility in tax and spend policy) is itself damaging - in particular because it ramps up uncertainty. That's one ...
1) What this thermostat analogy misses is that the act of constantly fiddling with the dial (volatility in tax and spend policy) is itself damaging - in particular because it ramps up uncertainty. That's one ...
October 24, 2025 at 9:55 AM
I always enjoy reading Simon's thoughts, but I think this misses two big things.
1) What this thermostat analogy misses is that the act of constantly fiddling with the dial (volatility in tax and spend policy) is itself damaging - in particular because it ramps up uncertainty. That's one ...
1) What this thermostat analogy misses is that the act of constantly fiddling with the dial (volatility in tax and spend policy) is itself damaging - in particular because it ramps up uncertainty. That's one ...
Some big reductions in gilt yields in recent days. It's unclear whether the OBR have already closed their forecast window or not, and so unclear whether it will feed directly into Budget calculations, but it's good news for the Chancellor regardless.
October 22, 2025 at 11:22 AM
Some big reductions in gilt yields in recent days. It's unclear whether the OBR have already closed their forecast window or not, and so unclear whether it will feed directly into Budget calculations, but it's good news for the Chancellor regardless.
The point my colleague @nickridpath.bsky.social makes here is an important and puzzling one. Given decent growth and (especially) higher-than-expected inflation so far this year, we'd expect receipts from e.g. VAT and income tax to be higher also. But no sign of that yet... Which is odd.
October 21, 2025 at 8:26 AM
The point my colleague @nickridpath.bsky.social makes here is an important and puzzling one. Given decent growth and (especially) higher-than-expected inflation so far this year, we'd expect receipts from e.g. VAT and income tax to be higher also. But no sign of that yet... Which is odd.
If there's one key message for the Chancellor from our analysis published today, it's this:
Doing a bigger package to increase ‘headroom’ wouldn’t be costless – but nor is limping from one forecast to the next under constant speculation that policy will be tightened again.
Doing a bigger package to increase ‘headroom’ wouldn’t be costless – but nor is limping from one forecast to the next under constant speculation that policy will be tightened again.
NEW: The Chancellor almost certainly has a fiscal repair job on her hands at next month’s Budget.
But doing the bare minimum risks another fiscal groundhog day next year.
🧵 THREAD on our new IFS Green Budget's findings on the UK's economic outlook and fiscal situation:
But doing the bare minimum risks another fiscal groundhog day next year.
🧵 THREAD on our new IFS Green Budget's findings on the UK's economic outlook and fiscal situation:
October 16, 2025 at 12:12 PM
If there's one key message for the Chancellor from our analysis published today, it's this:
Doing a bigger package to increase ‘headroom’ wouldn’t be costless – but nor is limping from one forecast to the next under constant speculation that policy will be tightened again.
Doing a bigger package to increase ‘headroom’ wouldn’t be costless – but nor is limping from one forecast to the next under constant speculation that policy will be tightened again.
There will be lots of speculation about tax over the next 6 weeks, for better or worse. This chapter is a plea for the government to think about how to make the system work better, rather than just raise the taxes which pose fewest short-term political hurdles.
Some highlights:
Some highlights:
NEW: Rachel Reeves needs a plan for a better tax system, not a half-baked dash for revenue.
📗 Stuart Adam, Isaac Delestre and @helenmiller.bsky.social's new IFS Green Budget chapter examines the Chancellor’s options for tax increases: ifs.org.uk/publications...
📗 Stuart Adam, Isaac Delestre and @helenmiller.bsky.social's new IFS Green Budget chapter examines the Chancellor’s options for tax increases: ifs.org.uk/publications...
October 13, 2025 at 8:59 AM
There will be lots of speculation about tax over the next 6 weeks, for better or worse. This chapter is a plea for the government to think about how to make the system work better, rather than just raise the taxes which pose fewest short-term political hurdles.
Some highlights:
Some highlights:
Re-bumping this article, which is in print today. Particularly pleased with this paragraph.
October 12, 2025 at 9:03 PM
Re-bumping this article, which is in print today. Particularly pleased with this paragraph.
The government is talking up the importance of ‘contribution’ and is planning a new ‘Unemployment Insurance’ benefit. What might that mean in practice? Well, for one thing, it might save the Treasury a few billion…
Some great new work: ifs.org.uk/publications...
With summary thread here 👇
Some great new work: ifs.org.uk/publications...
With summary thread here 👇
NEW: The UK social security system offers relatively little income protection after job loss.
THREAD on Martin Mikloš and @xiaoweixu.bsky.social's IFS Green Budget chapter on the options for introducing ‘unemployment insurance’:
THREAD on Martin Mikloš and @xiaoweixu.bsky.social's IFS Green Budget chapter on the options for introducing ‘unemployment insurance’:
October 9, 2025 at 11:14 AM
The government is talking up the importance of ‘contribution’ and is planning a new ‘Unemployment Insurance’ benefit. What might that mean in practice? Well, for one thing, it might save the Treasury a few billion…
Some great new work: ifs.org.uk/publications...
With summary thread here 👇
Some great new work: ifs.org.uk/publications...
With summary thread here 👇
I've written about the UK's productivity problem for @theobserveruk.bsky.social. Come for the comparison of the UK economy to a hedgehog, stay for the comparison of Rachel Reeves to a Dickens character.
observer.co.uk/news/busines...
observer.co.uk/news/busines...
In Britain’s ‘hedgehog economy’, growth is wild, spiky – ...
The spines on the OBR’s charts are a signal to the chancellor to pull all the levers to improve our growth prospects
observer.co.uk
October 8, 2025 at 9:13 AM
I've written about the UK's productivity problem for @theobserveruk.bsky.social. Come for the comparison of the UK economy to a hedgehog, stay for the comparison of Rachel Reeves to a Dickens character.
observer.co.uk/news/busines...
observer.co.uk/news/busines...
I did think it was weird that inflation was proving stubbornly high, but VAT receipts were coming in surprisingly low... Good news for Rachel Reeves
There goes my long held view that cash government receipts were accurate because you just had to add some columns in a bank account
on.ft.com/3J0Y6yE ONS revises down government borrowing estimates after data error
on.ft.com/3J0Y6yE ONS revises down government borrowing estimates after data error
ONS revises down UK government borrowing by £2bn after VAT error
[FREE TO READ] Office for National Statistics reduces estimate for current fiscal year just weeks before Rachel Reeves’ Budget
on.ft.com
October 8, 2025 at 8:04 AM
I did think it was weird that inflation was proving stubbornly high, but VAT receipts were coming in surprisingly low... Good news for Rachel Reeves
On 17 October, I'll be the least impressive panel member at this event at the LSE, debating the role of independent institutions and technocrats in guiding UK fiscal policy.
If that sounds like your idea of a good Friday night, sign up here:
www.eventbrite.com/e/a-sustaina...
If that sounds like your idea of a good Friday night, sign up here:
www.eventbrite.com/e/a-sustaina...
October 6, 2025 at 10:48 AM
On 17 October, I'll be the least impressive panel member at this event at the LSE, debating the role of independent institutions and technocrats in guiding UK fiscal policy.
If that sounds like your idea of a good Friday night, sign up here:
www.eventbrite.com/e/a-sustaina...
If that sounds like your idea of a good Friday night, sign up here:
www.eventbrite.com/e/a-sustaina...
On 16 October we're launching this year's IFS Green Budget, looking at the major challenges & choices facing the Chancellor this autumn.
Sign up for our event! Analysis from IFS & Barclays, plus reflections from Jonathan Haskel & Andy King. It'll be great. ifs.org.uk/events/ifs-g...
Sign up for our event! Analysis from IFS & Barclays, plus reflections from Jonathan Haskel & Andy King. It'll be great. ifs.org.uk/events/ifs-g...
IFS Green Budget 2025 | Institute for Fiscal Studies
The IFS Green Budget will assess the state of the UK economy and the government’s fiscal position ahead of the Autumn Budget.
ifs.org.uk
October 3, 2025 at 11:12 AM
On 16 October we're launching this year's IFS Green Budget, looking at the major challenges & choices facing the Chancellor this autumn.
Sign up for our event! Analysis from IFS & Barclays, plus reflections from Jonathan Haskel & Andy King. It'll be great. ifs.org.uk/events/ifs-g...
Sign up for our event! Analysis from IFS & Barclays, plus reflections from Jonathan Haskel & Andy King. It'll be great. ifs.org.uk/events/ifs-g...