Second Album Syndrome Event presentation.pdf

Second Album Syndrome Event presentation.pdf

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  Wifi 2QAG_Guest Welcome_Guests #Budget2025 November27 @resfoundation Second album syndrome? What Autumn Budget 2025 means for the public, financial markets and the cost of living Richard Hughes, Chair of the Office for Budget Responsibility Kamal Ahmed, Columnist at the Daily Telegraph Yael Selfin , Vice Chair and Chief Economist at KPMG James Smith, Research Director at the Resolution Foundation Chair: Ruth Curtice, Chief Executive at the Resolution Foundation
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  2 @resfoundation
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  3 @resfoundation
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  4 Potential productivity levels(output per hour worked, index 2019Q4=100): UK SOURCE: RF analysis of OBR, Economic and Fiscal Outlook, November 2025. @resfoundation The expected productivity downgrade arrived… OBR (Mar 2025) OBR (Nov 2025) Pre-financial crisis average Post -financial crisis average Outturn 92 96 100 104 108 112 116 2019Q1 2021Q1 2023Q1 2025Q1 2027Q1 2029Q1 2031Q1
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  5 Average earnings growth,outturn and successive OBR forecasts: UK Notes: Year on year growth rate of wages and salaries (equal to total compensation of employees minus employers' social contr ibutions) divided by employees. Source: RF analysis of ONS, UK Economic Accounts; ONS, Labour market statistics; OBR, Economic and Fiscal Outlook, various. @resfoundation …but came with a big offsetting change to wages
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  6 Change in publicsector net borrowing compared to March 2025 forecast, by component: UK Notes: 'Other' includes changes to capital and day -to-day spending and the OBR's SEND -related spending judgements. 'Giveaways' i nclude increases to welfare and other spending, and the fuel duty freeze. Source: RF analysis of OBR, Economic and Fiscal Outlook, November 2025. @resfoundation There was a backloaded increase in taxes
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  7 Average headroom heldagainst fiscal rules by Chancellor: UK, June 2010 – October 2024 Notes: Historical headroom is measured against the fiscal rules that applied at the time and are presented as a percentage of GD P, multiplied by October 2029 -30 NGDP for comparability with the OBR's latest forecast. This chart excludes fiscal events during the pandemic (November 2020 a nd March 2021), during which the fiscal rules were being broken by a significant margin. Source: RF analysis of OBR, Economic and Fiscal Outlook, November 2025. @resfoundation Extra headroom is welcome but the planned surplus is modest -£80bn -£60bn -£40bn -£20bn £0bn £20bn £40bn £60bn £80bn Jun 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Nov 15 Nov 16 Nov 17 Oct 18 Mar 20 Mar 21 Mar 22 Mar 23 Mar 24 Mar 25 Current surplus Current deficit Osborne (coalition) Osborne Hammond Sunak Hunt Reeves
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  8 @resfoundation
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  9 Annual impact oftax policy announcements at each major fiscal event since 1970: UK Notes: Aggregate effect of tax measures in final year of forecast for each fiscal event, shown in 2029 -30 prices, with past valu es uprated in line with nominal GDP. Based on forecasts from the time of each fiscal event (actual impacts on tax revenue may have differed). Major fiscal event i s defined as statements by the Chancellor with measures that were legislated for in a Finance Bill directly after that fiscal event. Source: RF analysis of OBR, Economic and Fiscal Outlook, November 2025; OBR, Policy measures database, March 2025. @resfoundation Tax rises across two Budgets are the largest on record -£80bn -£60bn -£40bn -£20bn £0 +£20bn +£40bn +£60bn 1970 1974 1978 1982 1986 1990 1993 1997 2001 2005 2009 2012 2015 2018 2022 2024 Election First after election Second after election Clarke Nov 1993 Sunak Mar 2021 Reeves Nov 2025 Healey Apr 1976 Barber Mar 1972
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  10 Change in annualincome as a result of alternative tax measures, by income vigintile: UK, 2030 -31 Notes: Both measures are modelled as raising £12 -13 billion. CPI adjusted to 2025 -26 terms. Source: RF analysis of DWP, Households Below Average Income using the IPPR tax -benefit model; OBR, Economic and Fiscal Outlook, November 2025. @resfoundation A manifesto -busting rate rise would’ve been less costly for most
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  11 Annual property taxpaid as a proportion of property value, by value of property: England, 2029 -30 Notes: House prices and Council Tax amounts in the source data have been uprated in line with OBR forecasts to provide estima tes for 2029 -30. Mansion tax charges have been uprated by the OBR’s forecast CPI in 2028 -29 to estimate levels in 2029 -30. Council Tax figures are a smoothed estimate of media n ratios by value band. Source: RF analysis of ONS, Wealth and Assets Survey and ONS, UK House Price Index: monthly price statistics. @resfoundation ‘Mansion tax’ is a step in the right direction
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  12 Total outturn andprojected Income Tax and National Insurance as a share of labour cost: UK excluding Scotland Notes: For consistency, tax rates are for unmarried employees under 65 with non -volatile earnings, and ignore mortgage interest and pension tax relief. Based on financial years, and the tax parameters that applied in October in years where rates varied. Self -employed Class 2 NI included until 2023, when the requirement to pay t his was removed. Projections (beyond 2025) based on earnings from OBR, Economic and Fiscal Outlook, November 2025. Source: RF analysis using median earnings figures from ASHE/NESPD and tax history from HMRC and IFS. @resfoundation The Budget didn’t tackle the record self -employment tax wedge
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  13 @resfoundation
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  14 Median and interquartilerange of annual savings from energy bill measures, and as a proportion of total non - housing expenditure, by after housing costs income deciles: GB, 2026 -27 Notes: Based on Q1 2026 price cap prices. Annual consumption values derived from LCFS spending data and re -weighted to account f or recent changes in Ofgem’s typical domestic consumption values (TDCVs). Assumes price cuts passed through to households on fixed tariffs. Source: RF analysis of Ofgem Price Cap methodology, ONS Living Costs and Food Survey data. @resfoundation There was welcome support with energy bill pressures
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  15 Change in annualincome as a result of tax and benefit policy changes announced this Parliament, by income vigintile: UK, 2029 -30 Source: RF analysis of DWP, Households Below Average Income using the IPPR Tax -Benefit Model. @resfoundation Tax and benefit changes this Parliament are progressive
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  16 Annualised growth inReal Household Disposable Income per person, by Parliament: UK Notes: Based on election dates and quarterly data. A quarter is included in a parliament if the quarter mostly falls within t he parliament. Source: ONS, UK Economic Accounts (series CRXX); OBR, Economic and Fiscal Outlook, November 2025. @resfoundation Nonetheless, the outlook for incomes remains dismal
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  • Fix thepublic finances: • Doubling headroom a wise move • Borrowing is higher before 2029 -30; debt is up. But plan relies on pre -election tightening • Tax smartly: • Generally welcome measures in the Budget (although tax freezes let highest earners off) • Reform should continue from here • Ease the squeeze: • Energy support most welcome…but bills jump in 2029 -30 • Scrapping of two -child limit should mean ½million fewer children in poverty • Policies announced in this Parliament have been progressive 17 How did the Chancellor do? @resfoundation
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  Wifi 2QAG_Guest Welcome_Guests #Budget2025 November27 @resfoundation Second album syndrome? What Autumn Budget 2025 means for the public, financial markets and the cost of living Richard Hughes, Chair of the Office for Budget Responsibility Kamal Ahmed, Columnist at the Daily Telegraph Yael Selfin , Vice Chair and Chief Economist at KPMG James Smith, Research Director at the Resolution Foundation Chair: Ruth Curtice, Chief Executive at the Resolution Foundation