Ruth Curtice

In her speech yesterday, the Chancellor said the question people will be asking themselves at the next election is "are me and my family better off?"

So what is the answer likely to be? 🧵

chart showing Impact of policy announcements on borrowing in last year of forecast, by fiscal event

Despite insisting this was not a fiscal event, Government policy decisions added £5.7 billion to borrowing, mostly due to higher SEND spending.

Ranking all fiscal events since 2010 by their impact on borrowing, today's Forecast is in the bigger half of fiscal events.

Speech had surprisingly little on global context. Truth is Iran has the potential to put government cost of living plans completely off track. UK exposed to disruption to LNG supplies from Qatar. Impact of gas price moves so far if sustained would be over £500 increase in energy price cap in July.

Disappointed not to see any immediate action on NEETs in particular. With almost one in six young people who want to work unable to find a job, they deserve clarity on minimum wage policy and an expanded Jobs Guarantee scheme now. Chancellor appeared to promise action soon.

We were promised no new policy.....and the speech delivered. Policy announcements since the last Budget still amount to over £4bn extra borrowing though, so if this was a fiscal event it would be some distance from the smallest ever (not even top 10).

Chancellor says current budget surplus of £24bn in 29/30. That's an increase in headroom of £2bn compared to the Autumn. Headroom to debt falling of £27bn up £3bn from the Autumn.

Headroom up by about £2bn. Small in the grand scheme of the public finances. Borrowing shift overall looks like marginal improvement relative to Autumn.

Chancellor confirms she will make a growth speech in 2 weeks time. "mais lecture number 2"

Chancellor appears to promise further action on youth unemployment. Good. Why not crack on and announce it today?

Level of GDP will be slightly lower by the end of the forecast based on those growth numbers.

Chancellor tells unemployment higher but not by how much. Ends at 4.1% - same as the Autumn.

Growth forecasts lower (0.3ppt) in 2026 but same after that. Don’t forget that the level of GDP was 0.4ppt lower than the OBR expected by the end of 2025 though.

Inflation came in lower at the end of last year than the OBR expected. Unsurprisingly Chancellor keen to emphasise important relief from further cost of living pressures, though of course this is about the slowing of price rises not price falls. And global events could completely change the outlook.

Shortest ever gap btwn OBR Autumn&Spring forecast and no big news (forecast closed before this weekend) means we aren't expecting sig changes. Lower growth, higher unemployment, lower migration, lower inflation , higher wages and lower debt interest costs should broadly come out in the wash.

Live commentary on Chancellor's speech coming up. Expect to be told some version of "the plan is working" with themes on stable public finances, growth and cost of living. More unusually for only about 20 minutes!

Things to watch out for next Tuesday: GDP downgrade, unemployment upgrade, migration change. No red box but still a top panel to digest it all the next day!

Jonathan Marshall, Principal Economist at the Resolution Foundation, said: “Today’s price cap announcement is genuinely good news for families who’ve been squeezed hard by energy bills for years now with well targeted support that helps poorer families with the greatest need. “But bills remain far higher than they were before the energy crisis hit, and the relief we’re seeing today won’t last forever. “Network costs are already creeping up, and come 2029, the Government’s support disappears almost overnight – leaving ministers facing an uncomfortable choice between letting family bills jump again, or finding more money from a cash-strapped Treasury.”

📢 New price cap announcement this morning!

Ofgem have confirmed there will be a 7 per cent fall in energy price cap in Q2 2026, boosting living standards for lower-income households.

Find out more ⤵️ buff.ly/K29q0KX

YouTube video by Resolution Foundation Who are 'Unsung Britain'?

A state of the (poorer half of) the nation debate!

Great chat on social, political and economic change of the last generation with @ruthcurtice.bsky.social & Scarlett Maguire

www.youtube.com/watch?v=42ft...

(or Audio-only podcast here: resolutionfoundation.podbean.com/e/who-are-un...)

Today's consultation on SEND spending (assets.publishing.service.gov.uk/media/699862...) shows why policy announcements shd come with fiscal events. It *seems* to contain new money, but isn't clear how it will be funded or what it means for the fiscal rules. Thread on what is going on to follow...

Today's SEND announcements a good example of why it is best to make spending/tax announcements all together in a fiscal event. Lack of clarity about how much money is new (seems like £3.5bn is genuinely additional to previously announced totals), what it means for existing pressures or future years.

Why reliable data matters in one picture

The UK's productivity performance is either:
- still rubbish; or
- improving greatly after a terrible spell

You choose

UK inflation data out this morning shows a sharp, broad-based fall in CPI inflation from 3.4% in December to 3.0% in January - this is welcome good news. Inflation should now normalise rapidly in the coming months for the first time since before the pandemic. Thread to follow...

Good to hear that Millburn is being comprehensive in his review when he spoke on today programme this morning. Clearly, though, with today's stats demand for young workers is part of the problem - not just supply of them.

New Chief Economic Advisor to the Treasury appointed Professor Brian Bell has been appointed as the new Chief Economic Advisor to the Treasury and Head of the Government Economic Service, replacing Sam Beckett.

Big signing here for the government (and civil service) as Prof Brian Bell becomes Chief Economic Advisor at the Treasury. Brian will bring much-needed economic rigour and expertise, as well as adding A LOT of drive and energy to UK economic policymaking.

Living Standards Outlook 2026 • Resolution Foundation We present a living standards outlook for non-pensioner families, highlighting strong income growth over 2026-27, driven by benefit changes, but a weak longer-term outlook. It argues that a coherent s...

On a tough day, we also snuck out some good news for a Prime Minister promising to battle the cost of living - we project STRONG (4.7%) living standards growth for working age families on below average incomes in 26-27. www.resolutionfoundation.org/publications...

Unsung Britain: working harder, getting nowhere Mike Brewer explains how recent decades have squeezed the households who can least afford it

You can read a summary of the analysis we published in @mikebrewerecon.bsky.social substack or the whole book: resolutionfoundation.substack.com/p/unsung-bri... www.resolutionfoundation.org/publications...

Paul Gregg described the 4 waves of British poverty: pensioner poverty (action taken), worklessness (action taken), in-work poverty (less so, 55% non-pensioner families in poverty have someone in work), & an emerging 4th wave - our analysis shows sharp falls in real incomes for the very poorest.

On health and work it was fantastic to hear lots of optimism - from @katejosephs.bsky.social on the success of trailblazers in Sheffield, from @drsarahhughesceo.bsky.social about the power of community hubs and from Charlie Mayfield about the win-win from employer action.

Drawing conclusions: Should people be able to use their pension savings to buy a home? - NEST Insight Unit Read our report: Using pension savings to support home ownership (PDF) Our year-long study brings evidence to the debate on linking housing and pensions – highlighting potential benefits for some, ris...

The panel discussions were rich with policy ideas too. Interesting to hear Nikhil Rathi say we should give people rainy day access to their pensions and consider their use as housing deposits (on which I see Nest insight have an interesting report www.nestinsight.org.uk/drawing-conc...)

Includes a thoughtful speech from Andy Burnham on why the role of politics is to stick up for those with less political voice (like those on below-average incomes that our book is about) and why he thinks government should be much more interventionist on the cost of essentials.