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Budget delivers large increases in spending, tax, and borrowing

The Budget increases spending by £70 billion annually, with two-thirds on current and one-third on capital spending. Half is funded through tax increases which raise £36 billion annually and push the tax take to a record 38 per cent of GDP. The rest is funded by £32 billion more borrowing annually which temporarily boosts GDP growth to 2 per cent in 2026, but leaves output unchanged in the medium term. New fiscal rules, to balance the current budget and get net financial liabilities falling relative to GDP in five years, are met by small margins of £10 and 16 billion respectively.

Economic and fiscal outlook press briefing: watch again or download the speaking notes and slides

Articles

Income tax and the earnings distribution

Amy Nash | 11 July 2024

In this article, we set out how we put the PAYE income tax forecast together in our biannual Economic and fiscal outlooks; how new distributional analysis of earnings informs and improves our forecast; and what our latest forecast assumes about earnings growth across the distribution.

Trends in labour market inactivity for caring purposes

Katya Ring, Holly McCurry, Rosanna Colthorpe and Joshua Rawlings | 11 January 2024

In this article, we examine the reasons for the consistent downwards trend in inactivity for caring purposes coming to an end and what it might imply for our forecast for overall labour force participation.

Dynamic scoring of policy measures in OBR forecasts

Staff of the OBR | 9 November 2023

In this article, we set out how the OBR’s economic and fiscal forecasts capture the dynamic effects of policies on the economic behaviour of people and businesses.

The OBR ready reckoner

Balint Benke and João Sousa | 12 October 2023

Our new ready reckoner allows users to obtain quick, indicative estimates of how changes in the economy affect public finances.

300 years of UK public finance data

Luke Lanskey and Conor O’Loughnan | 20 July 2023

Our new historical public finances database contains 300 years of tax, spending, borrowing and debt data. This article tells the story of government borrowing and debt since 1700 and how the level and composition of tax and spending have evolved over this period.

Key publications

Medium-term forecasts

Five year forecasts for the UK economy and public finances and an assessment of whether the Government is likely to achieve its fiscal targets.

Fiscal risks and long-term projections

Report into the main fiscal risks facing the UK and sustainability of the public finances.

Forecast evaluation

Assessment of how our forecasts compare to outturn data and identifying lessons for future forecasts.

Welfare spending trends

An in-depth look at the drivers of welfare spending both inside and outside the Government’s welfare cap.

Monthly commentary

Our monthly commentary on the latest public finances data and how it compares to our most recent forecast.

Welsh taxes

We are commissioned by the Welsh Government to produce independent forecasts for devolved Welsh taxes.