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Nick Ridpath @nickridpath.bsky.social · 10/09/2026

In the same OBR scenario of 100k extra migration per year, it estimated that maintaining public service quality could cost ~£3bn in the fifth year of the forecast, or 1/3 of the extra tax revenues. This reflects that in general, spending on working age people tends to be lower.

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Nick Ridpath @nickridpath.bsky.social · 10/09/2026

These are rough estimates, and the composition of migrants will matter a lot too. There are likely big differences by route – with those moving to the UK to work unsurprisingly more likely to work (and so likely to pay more in tax) than those studying or seeking asylum.

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Nick Ridpath @nickridpath.bsky.social · 10/09/2026

We’d expect higher migration – if it resembled the current composition of migration – to increase tax revenues, in part because most new migrants are currently working age.

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Nick Ridpath @nickridpath.bsky.social · 14/05/2026

Pretty good news on growth in the first quarter of the year today, but worth not over-interpreting. In each of the last four years, we've seen higher growth in Q1 than later in the year - you'd want to see good news later in the year to think this is a sign of a genuine improvement.

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Nick Ridpath @nickridpath.bsky.social · 12/03/2026

However, important to say we're not in this pessimistic scenario yet - the gas price increase is well below the aftermath of the Russian invasion of Ukraine, though it remains to be seen what happens to oil prices. But the risk to the public finances still a key point to bear in mind going forward.

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Nick Ridpath @nickridpath.bsky.social · 12/03/2026

The OBR has modelled a pessimistic scenario in the past, discussed in our Spring Forecast response last week. A 75% spike in energy prices for a year - not a projection from us or the OBR, to be clear - could mean a 5% spike in inflation, lower growth, and £20-40bn more borrowing in the medium term

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Nick Ridpath @nickridpath.bsky.social · 04/03/2026

There's lots of uncertainty about unemployment rise - OBR has consistently forecast it to come down quickly, but Bank of England suggest higher unemployment could be sustained for a few years. This is v important for the public finances - sustained higher unemployment could hit borrowing hard.

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Nick Ridpath @nickridpath.bsky.social · 04/03/2026

The Spring Forecast had a higher revenue forecast, driven mainly by higher equity prices (up 8% between forecasts) adding £9bn extra receipts in 2030/31. This is good news - but equities move regularly: given global volatility, there’s a risk higher forecast could be temporary.

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Nick Ridpath @nickridpath.bsky.social · 03/03/2026

The OBR has revised its annual net migration forecast down by 50-100k, with a small negative impact on forecast tax revenues. If new ONS data for this year shows lower immigration, the OBR could further reduce their net migration assumption, with larger effects on tax revenues.

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Nick Ridpath @nickridpath.bsky.social · 03/03/2026

The OBR’s current budget forecast has barely changed, with borrowing still set to fall over the next few years. Past governments have often set out plans for a current budget surplus, but it’s very rare that they’ve achieved it. That will be the key challenge going forward.

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Nick Ridpath @nickridpath.bsky.social · 19/12/2025

New ONS public finance data today shows central government revenues are still lagging significantly below March expectations. Given inflation has been higher than forecast, this is surprising - even VAT receipts, which one might expect to rise with inflation, are below forecast

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Nick Ridpath @nickridpath.bsky.social · 16/10/2025

The government has a second fiscal rule, the debt rule, which is more volatile, with no plans for a range. Here, the chances of surviving are even slimmer – the £15bn the government had in Spring would be v unlikely to survive for three years.

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Nick Ridpath @nickridpath.bsky.social · 16/10/2025

To hold up over a longer timeframe, such as 3 years, the Chancellor would need far more headroom: £9.9bn would only give a 1 in 4 chance of avoiding further changes. To get above 50%, she’d need around £50bn, around the levels maintained in 2013 & 2014.

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Nick Ridpath @nickridpath.bsky.social · 16/10/2025

Now, from 2027, there will be a range of 0.5% of GDP on the borrowing rule in the Spring, so it binds less tightly. If this were brought forward, it would improve the Chancellor’s chances of not needing further changes to over 80%. But we might want to avoid volatility for longer than six months…

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Nick Ridpath @nickridpath.bsky.social · 16/10/2025

We looked at past revisions to the OBR forecast, and what proportion of them the Chancellor would survive without being bounced into further changes – we find that to withstand 80% of past shocks, she would need around £26 billion of headroom.

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Nick Ridpath @nickridpath.bsky.social · 16/10/2025

With a fiscal “groundhog day” of discussions about how the Chancellor could keep meeting her fiscal rules for the second time this year, we were wondering: what are the chances we could be doing all this again in Spring? The answer: pretty high. Particularly nerdy thread:

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