The Spring Statement saw the Office for Budget Responsibility (OBR) make further favourable revisions to their forecasts, opening up the possibility of a loosening of fiscal policy in this autumn's Budget. However, the picture is clouded by forthcoming changes to the treatment of student loans in the public finances and the ongoing uncertainty over Brexit. The OBR had already made some sizable downgrades to its borrowing forecasts in the October 2018 Budget and it added to these in the March 2019 Spring Statement. This came despite some minor downgrades to its expectations for economic growth, with the OBR squaring the circle by explaining that (ⅰ) economic growth had proved to be more revenue rich than it had previously estimated, with tax receipts from high earners being a particular source of upside surprise, and (ⅱ) that a reduction in gilt yields meant that the cost of servicing government debt was projected to be lower.
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