Box sets » Economic and fiscal outlook » December 2012
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Economic and fiscal outlook - December 2012 | Box: 4.1 | Page: 109
Reclassification of Bradford & Bingley plc and Northern Rock
During the financial crisis, both Bradford & Bingley (B&B) and Northern Rock (Asset Management) (NRAM) were transferred to public ownership. The ONS has announced that it will reclassify both bodies into the central government sector. This box outlined the impact of the reclassification on our fiscal forecast. -
Economic and fiscal outlook - December 2012 | Box: 4.2 | Page: 141
Switches between DEL and AME affecting local authorities
In this forecast there were two policy switches that shifted spending between RDEL and AME, which applied from 2013-14 onwards. These policies were for the 50 per cent retention of business rates for local authorities in England, and for localised council tax reduction schemes. This box outlined these changes and examined the subsequent impact these would have on our forecasts. -
Economic and fiscal outlook - December 2012 | Box: 4.3 | Page: 145
Universal credit
In Chapter 4 of our December 2012 EFO, we discussed the fiscal outlook for 2012-13 to 2016-17. In this box, we discussed changes to the provisional universal credit forecast that was included in our March 2012 EFO. Changes to the forecast were due to a number of factors, including policies announced at Budget 2012 and finalisation of policy parameters in universal credit as well as .refinements to the methodology and assumptions used to forecast universal credit. We also discussed the main uncertainties in the forecast, which largely related to the unpredictability given the scale of the policy. The analysis in this box has since been superseded by developments in the universal credit forecast, though many of the key uncertainties remain. -
Economic and fiscal outlook - December 2012 | Box: 4.4 | Page: 162
Fiscal impact of the 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 December 2012. -
Economic and fiscal outlook - December 2012 | Box: 2.2 | Page: 27
The performance of past OBR economic and fiscal forecasts
In October 2011, we published our first Forecast evaluation report (FER). This box summarised the key findings, including a discussion of weaker than expected GDP growth and why, despite this, public sector borrowing has fallen broadly as we expected it would. -
Economic and fiscal outlook - December 2012 | Box: 3.1 | Page: 39
Production function approach
Our latest estimates of the output gap - which extended up to the third quarter of 2012 - implied a narrowing of the output gap since our previous forecast, despite actual output having remained broadly flat. Given the strength in the labour market over the period suggested a sharp fall in trend total factor productivity (TFP). This box set out the methodology behind that assessment, based on a production function approach that allowed us to separate out productivity growth into contributions from capital deepening and TFP. -
Economic and fiscal outlook - December 2012 | Box: 3.2 | Page: 43
The productivity puzzle
Productivity growth since the late-2000s recession has been relatively weak. This box set out some proposed explanations for that weakness, including measurement issues, lower investment, compositional effects, labour market factors and impaired financial markets. Most commentators believed that some combination of these factors was likely to be responsible. The relative importance of these factors also has implications for the extent to which the shortfall was believed to be demand or supply-related. -
Economic and fiscal outlook - December 2012 | Box: 3.3 | Page: 51
The economic effects of policy measures
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 December 2012 Economic and Fiscal Outlook, we made adjustments to our forecasts of real GDP, inflation and property transactions -
Economic and fiscal outlook - December 2012 | Box: 3.4 | Page: 57
The Funding for Lending Scheme
The Funding for Lending Scheme (FLS) was launched by the Bank of England and the Government in July 2012 to encourage banks and building societies to expand their lending by providing funds at lower rates than prevailing market rates. This box discussed the uncertainties associated with the transmission mechanism of this scheme and the possible impact on real GDP. -
Economic and fiscal outlook - December 2012 | Box: 3.5 | Page: 59
The Financial Policy Committee
The Financial Policy Committee (FPC) was set up after the financial crisis to oversee the stability of the financial system. This box discussed the specific macro-prudential tools the FPC can apply and their potential implications for the economy and our forecasts.