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23 March 2011

Economic and fiscal outlook – March 2011

pdf

Economic and fiscal outlook - March 2011

March 23, 2011 – 8.83 MB

Supporting documents

  • xls

    March 2011 economic and fiscal outlook charts and tables

    March 23, 2011 – 3.21 MB
  • xls

    March 2011 economic and fiscal outlook supplementary economy tables

    March 23, 2011 –
  • xls

    March 2011 economic and fiscal outlook supplementary fiscal tables

    March 23, 2011 – 2.21 MB
  • pdf

    Press Notice: March 2011 Economic and fiscal outlook

    March 23, 2011 – 28.64 KB
  • pdf

    Press Notice: Appointment of an expert advisory panel

    March 23, 2011 – 79.88 KB
  • pdf

    Log of substantive contact between the OBR and Treasury Ministers, Special Advisers and their private office staff between 30 November 2010 and 22 March 2011

    March 23, 2011 – 267.92 KB
  • xls

    March 2011 data sources

    March 23, 2011 – 84.50 KB
  • pdf

    Discussion paper No.1: What should we include in the fiscal sustainability report?

    March 23, 2011 – 1.14 MB
  • pdf

    Letter from Dave Ramsden to Robert Chote on exceptional pre-release access

    March 23, 2011 – 214.58 KB
  • pdf

    Letter from Robert Chote to Dave Ramsden on exceptional pre-release access

    March 23, 2011 – 184.19 KB
  • pdf

    Letter from Andrew Tyrie MP to Robert Chote on OBR's treatment of proceeds

    March 23, 2011 – 172.11 KB
  • pdf

    Letter from Robert Chote to Andrew Tyrie MP on the treatment of proceeds

    March 23, 2011 – 1.02 MB

Supplementary documents

Information or data which has been released as a result of external requests, since the original publication of the main document.

  • pdf

    Oil and gas revenue forecasts - expenditure assumptions

    April 23, 2013 – 36.71 KB
  • pdf

    Corporation tax on UK Oil and Gas Production

    July 21, 2011 – 21.74 KB
  • pdf

    Household debt - Economic and fiscal forecast March 2011

    April 21, 2011 –
  • pdf

    GDP income components - Economic and Fiscal forecast March 2011

    April 21, 2011 –
  • pdf

    Market sector employment - Economic and Fiscal forecast March 2011

    April 21, 2011 –
  • pdf

    Air passenger numbers - March 2011

    March 28, 2011 – 22.94 KB
  • pdf

    ROSSI inflation forecast - Economic and fiscal outlook March 2011

    March 28, 2011 – 76.20 KB
  • pdf

    Variables used in cyclical indicator estimates of the output gap - Economic and fiscal outlook March 2011

    March 28, 2011 – 207.85 KB

Presentations

  • pdf

    OBR's economic and fiscal outlook presentation

    March 23, 2011 – 329.54 KB

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Boxes

Within each of our key publications we include topical ‘boxes’. These self-contained analyses are unique to this publication and tend to cover recent developments in the economy or public finances that complement the main discussion of our analyses.

Economic and fiscal outlook - March 2011 | Box: 3.1 | Page: 39

The impact of policy changes on the economic forecast

In each Economic and fiscal outlook we publish a box that summarises the effects of the Government’s new policy measures on our economy forecast. These include the overall effect of the package of measures and any specific effects of individual measures that we deem to be sufficiently material to have wider indirect effects on the economy. In our March 2011 Economic and Fiscal Outlook, we made adjustments to our forecast of inflation.

Economy categories: Inflation

Fiscal categories: Receipts, Fuel duty, Income tax, Corporation tax

Economic and fiscal outlook - March 2011 | Box: 3.2 | Page: 47

The oil price and the economic forecast

At the time of publication, oil prices had risen by £15 since the previous forecast. This box, from our March 2011 Economic and fiscal outlook, considered the potential economic implications, including the short-run effects on inflation and household consumption as well as possible longer-run effects on potential supply and the equilibrium capital stock.

Economy categories: Oil prices

Economic and fiscal outlook - March 2011 | Box: 3.3 | Page: 56

Decomposing the savings ratio

Decomposing the savings ratio
The household saving ratio captures both the disposable income that households do not spend on consumption, and changes in the equity households have in pension funds. This box described how the household saving ratio is calculated, and considered the relative contribution of pension and non-pension saving to the saving ratio over the preceding decade. The box also discussed possible factors behind recent movements in pension saving.

Economy categories: GDP by expenditure, GDP by income, Household disposable income, Household consumption, Household saving ratio

Cross-cutting categories: Pensions

Economic and fiscal outlook - March 2011 | Box: 3.4 | Page: 69

Consumer prices index excluding indirect taxes (CPIY)

Consumer prices index excluding indirect taxes (CPIY)
In the years prior to our March 2011 forecast there had been a number of changes to the rate of VAT, which affected CPI inflation. The Consumer Price Index excluding indirect taxes (CPIY) provides a measure of inflationary pressures excluding the effects that policy changes have on the CPI measure. This box considered how changes in VAT had contributed to the difference between CPIY and CPI at the time and what this meant for underlying inflationary pressures.

Economy categories: Inflation

Economic and fiscal outlook - March 2011 | Box: 3.5 | Page: 70

The long-run differences between the CPI and RPI

The long-run differences between the CPI and RPI
One of the key differences between the CPI and RPI inflation measures arises from the formulae used to construct the indices. In the year leading up to our March 2011 forecast, the contribution of this 'formula effect' to the divergence between CPI and RPI inflation had increased. This box explained the possible implications for our long-run assumption about the CPI-RPI wedge and our inflation forecast.

Economy categories: Inflation

Economic and fiscal outlook - March 2011 | Box: 3.6 | Page: 73

General government employment

General government employment
Our general government employment (GGE) forecast is based on projections of the growth of the total government paybill and paybill per head, which is in turn based on the Government's latest spending plans. Ahead of our March 2011 forecast, ONS estimates of general government employment were revised up, largely reflecting the reclassification of employees in further education colleges. In this box we set out the extent to which changes to our general government employment forecast were a result of our revised projections for paybill growth as opposed to data revisions.

Economy categories: General government employment, Labour market, Employment and unemployment

Fiscal categories: Public spending, Departmental spending, Locally financed expenditure

Economic and fiscal outlook - March 2011 | Box: 3.7 | Page: 84

Monetary policy, output and employment in alternative scenarios

In our central forecast, interest rates are assumed to evolve in line with financial market expectations. For alternative economic scenarios which involve different paths for the output gap and inflation, it is useful to specify rules for the way monetary policy is set and for how output and employment will respond. In this box, we set out the rules that governed those relationships in the scenarios we analysed in the March 2011 Economic and fiscal outlook: a persistent inflation scenario and a weak euro scenario.

Economy categories: Output gap, Labour market, Employment and unemployment, Nominal GDP, Inflation

Cross-cutting categories: Monetary policy

Economic and fiscal outlook - March 2011 | Box: 4.1 | Page: 111

The oil price and the fiscal forecast

The oil price and the fiscal forecast
The world price of oil increased sharply in 2010, reflecting rising world demand and unrest in the Middle East and North Africa. This box explored the impact this had on our public finances forecast at the time, from higher North Sea oil and gas revenues to the second round effects stemming from higher inflation.

Economy categories: Oil prices

Fiscal categories: Receipts, Fuel duty, Oil and gas revenues

Economic and fiscal outlook - March 2011 | Box: 4.2 | Page: 138

Fiscal impact of financial interventions

The Government undertook a number of interventions in the financial sector in response to the financial crisis and subsequent recession of the late 2000s. This box provided an update of the estimated net effect of them on the public finances as of March 2011.

Cross-cutting categories: Financial sector, Financial interventions

Economic and fiscal outlook - March 2011 | Box: 4.3 | Page: 144

Impact of inflation on the public finances

This box set out the various impacts that higher inflation has on the public finances. These include direct effects (e.g. on income tax and debt interest spending), the impact on nominal tax bases (such as household consumption) and the impact on departmental spending.

Economy categories: Inflation

Fiscal categories: Departmental spending, Receipts, Welfare spending, National Insurance Contributions, VAT, Business rates, Income tax, State pension, Public service pension payments, Public spending

Economic and fiscal outlook – November 2010
Economic and fiscal outlook – November 2011

Publications

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