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The Institute for Fiscal Studies @theifs.bsky.social · 18m

“A “steady-as-she-goes” Budget is not an option available to the Chancellor.” Read our IFS Green Budget report, funded by @nuffieldfoundation.org in association with Barclays, here: ifs.org.uk/publications...

Quote from IFS Director Helen Miller: "John Healey likely faces a forecast in which borrowing is still expected to fall in coming years and the fiscal rules are still being met. Despite that, a “steady-as-she-goes” Budget is not an option available to the Chancellor. Choosing to stay the course with the inherited tax and spending plans would mean allowing inflation to blow departments’ spending plans off course."

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The Institute for Fiscal Studies @theifs.bsky.social · 18m

‘Headroom’ never gives a full picture of the health of the public finances, and debt is set to remain high in coming years. Any significant top-up to day-to-day spending should be met through tax rises or spending cuts elsewhere, rather than increased borrowing.

Chart shows Public Sector Net Financial Liabilities as a share of national income. Title states: "Debt is high and not set to meaningfully fall over the next five years: debt interest now makes up £1 of every £13 the government spends."

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The Institute for Fiscal Studies @theifs.bsky.social · 18m

The plans John Healey inherited are for borrowing to fall quickly over the coming years – but borrowing will likely fall more slowly in the short run than previously expected. This will make the government’s plans to reduce borrowing more backloaded.

Chart shows public sector net borrowing as a share of GDP. Title states: "Borrowing is set to be higher under all our scenarios in the short term."

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The Institute for Fiscal Studies @theifs.bsky.social · 18m

The Chancellor’s plan to reduce borrowing in order to meet the fiscal rules will be predicated on the spending totals he sets out. If John Healey sets out spending plans that he would not be willing to live within, his plan for meeting the fiscal rules will not be credible.

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The Institute for Fiscal Studies @theifs.bsky.social · 18m

If the government also wanted to raise defence spending to 3% of GDP by 2030, this could cost £11bn in 2030–31. The government does not have to top up budgets. But keeping spending totals unchanged would mean scaling back ambitions or accepting a squeeze on some services.

Chart shows illustrative scenario for departmental top-ups in 2030–31. Title states: "Choosing to offset inflation, avoid cuts elsewhere and fund higher defence spending could require a £35 billion top-up to departmental budgets."

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The Institute for Fiscal Studies @theifs.bsky.social · 18m

Departmental budgets are set in cash terms, so higher inflation forecasts since March will squeeze real-terms budgets further. Under Barclays’ latest inflation forecast, top-ups of around £15bn would now be needed in 2030–31 to leave budgets as generous as they looked in March.

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The Institute for Fiscal Studies @theifs.bsky.social · 18m

In one scenario for the next Spending Review, health grows by 2.7% a year in real terms and defence stays at 2.7% of GDP. This implies annual real cuts of 0.9% to other departments. Avoiding these cuts could require top-ups of around £9bn in 2030–31.

Chart shows illustrative scenario for real-terms growth in departmental budgets between 2027–28 and 2030–31, with total departmental spending growing at an annual real average of 0.9%. Title states: "Even in March, next year’s Spending Review looked challenging, with slow planned growth in total spending forcing difficult decisions."

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The Institute for Fiscal Studies @theifs.bsky.social · 18m

The main challenge the Chancellor will face at the Budget will be from public service spending. Pressures could plausibly sum to £35 billion in 2030-31. Even back in March, plans already looked tight because spending growth is planned to slow markedly.

Chart shows planned annual real-terms spending growth for day-to-day and capital spending based on March 2026 OBR forecast. Title states: "On inherited plans, departmental spending growth is front-loaded, and set to slow sharply after this year."

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The Institute for Fiscal Studies @theifs.bsky.social · 18m

The precise amount of ‘headroom’ the Chancellor could have at the Budget is very uncertain, and particularly sensitive to the OBR’s forecast for earnings. Plausible scenarios for earnings could see the headroom number shift by around £10bn in either direction.

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The Institute for Fiscal Studies @theifs.bsky.social · 18m

Higher interest rates will push up spending. Higher inflation will also push up spending but will likely increase forecast revenues by more. These effects are VERY uncertain. In a plausible scenario, this could leave 'headroom' at £21bn, before any policy changes at the Budget.

Chart shows scenario for headroom compared to OBR March 2026 forecast. Title states: "There is significant uncertainty, but in a plausible scenario, ‘headroom’ against the current budget rule would be around £20 billion in 2029–30."

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The Institute for Fiscal Studies @theifs.bsky.social · 18m

The economic context for this Budget is heavily influenced by conflict in the Middle East. Interest rates on government debt are higher, and inflation is likely to stay higher for longer. The fiscal impacts of these changes will be significant.

Charts shows interest rates on 10-year UK government debt and annual inflation (CPI). Title states: "Both interest rates on government debt and inflation are higher than was expected in March."

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The Institute for Fiscal Studies @theifs.bsky.social · 18m

NEW: The Chancellor’s fiscal ‘headroom’ could be larger than many expect, but spending pressures will be a key challenge for John Healey at the Budget. 🧵 Here are the main findings from our 2026 IFS Green Budget, funded by @nuffieldfoundation.org in association with Barclays:

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The Institute for Fiscal Studies @theifs.bsky.social · 48m

Read all the analysis from the IFS Green Budget 2026, funded by @nuffieldfoundation.org and in association with Barclays, here: ifs.org.uk/publications...

ifs.org.uk

https://ifs.org.uk/publications/green-budget-2026-full-report

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The Institute for Fiscal Studies @theifs.bsky.social · 48m

“If the Chancellor simply pencils in implicit cuts that he knows he would never be willing to deliver, his plans to cut borrowing, and thereby meet the fiscal rules, won’t be realistic.” @helenmiller.bsky.social outlines John Healey's choices as part of the IFS Green Budget 2026, out today.

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The Institute for Fiscal Studies @theifs.bsky.social · 10/10/2026

Why is spending on disability benefits increasing? 🎙️ @helenmiller.bsky.social and @eduinlatimer.bsky.social discuss the factors that may have driven the increase in spending, in our recent podcast on whether disability benefits need reform:

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The Institute for Fiscal Studies @theifs.bsky.social · 10/10/2026

📗 Read the full report, written by @stephenjarvis.bsky.social, @peterlevell.bsky.social, and Bobbie Upton and funded by @nuffieldfoundation.org, here: ifs.org.uk/publications...

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The Institute for Fiscal Studies @theifs.bsky.social · 10/10/2026

📊 #IFSSatStat: The PM's decision to cut VAT on electricity lowers prices for households by 5%, but because of other cost increases - primarily higher gas prices - the average household electricity bill is just £3.30 lower in October compared to September.

Chart shows electricity price per kilowatt-hour breakdown across households in Great Britain, 2017 - 2025. Title states: "Average household electricity prices in Great Britain increased by 62% in real terms between 2017 and 2025 driven in large part by higher gas prices."

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The Institute for Fiscal Studies @theifs.bsky.social · 09/10/2026

Spending on working age disability benefits has risen from £14 billion in 2019 to £25 billion today. 🎙️ @helenmiller.bsky.social and @eduinlatimer.bsky.social discuss the rise in spending and expected forecasts, in our recent podcast on whether disability benefits need reform:

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The Institute for Fiscal Studies @theifs.bsky.social · 08/10/2026

NEW PODCAST: Are renewables making electricity more expensive? 🎙️ For our latest edition of IFS Zooms In, @helenmiller.bsky.social, @peterlevell.bsky.social, and @stephenjarvis.bsky.social, explore the economics of renewable energy.

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The Institute for Fiscal Studies @theifs.bsky.social · 08/10/2026

Since 2019, government spending on working age benefits has risen from 4.2% to 4.7% of GDP. 🎙️ @helenmiller.bsky.social and @eduinlatimer.bsky.social explain how working age benefits spending has changed overtime, in our recent podcast on whether disability benefits need reform:

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The Institute for Fiscal Studies @theifs.bsky.social · 07/10/2026

NEW: "It would push up the price of high-end housing, benefiting existing owners more than those who might buy such properties in future." Senior Economist Stuart Adam responds to the Conservative Party's announcement on changes to inheritance tax.

Quote from Senior Economist Stuart Adam. Quote reads: "The biggest beneficiaries would be those with the highest wealth and the most valuable homes. These will mostly be people living in London and the South-East. When put alongside the abolition of stamp duty on main homes and a cancellation of the ‘mansion tax’ it would push up the price of high-end housing, benefiting existing owners more than those who might buy such properties in future."

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The Institute for Fiscal Studies @theifs.bsky.social · 07/10/2026

What are personal independence payments (PIP)? 🎙️ @helenmiller.bsky.social and Tom Waters explain how PIP works and who it is for, in our recent podcast on whether disability benefits need reform:

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The Institute for Fiscal Studies @theifs.bsky.social · 05/10/2026

You can also see all of our open roles here ➡️ ifs.org.uk/jobs

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The Institute for Fiscal Studies @theifs.bsky.social · 05/10/2026

✨ We’re hiring! ✨️ 🧾 Our 2026 recruitment brochure explains everything you need to know as a prospective applicant: what roles we're recruiting for, when applications close, and life working at the IFS. Take a look here ➡️ ifs.org.uk/system/files...

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The Institute for Fiscal Studies @theifs.bsky.social · 05/10/2026

How did net migration in the UK change after the pandemic? 🎙️ @helenmiller.bsky.social and @maxwarner.bsky.social discuss the changing trends in net migration, from our recent podcast on the impact of immigration on the public finances:

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The Institute for Fiscal Studies @theifs.bsky.social · 04/10/2026

How do immigrants impact tax revenues? 🎙️ @helenmiller.bsky.social and @maxwarner.bsky.social explain, from our recent podcast on immigration and the public finances:

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The Institute for Fiscal Studies @theifs.bsky.social · 03/10/2026

In 2024, there were roughly 13 million people living in the UK who were born abroad. 🎙️ @helenmiller.bsky.social and @msumption.bsky.social discuss how immigration has changed over time in the UK, from our recent podcast on the impact of immigration on the public finances:

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The Institute for Fiscal Studies @theifs.bsky.social · 03/10/2026

📊 #IFSSatStat: The new triple lock announced by the Prime Minister this week removes the most expensive and unpredictable part of the triple lock: the fact that it permanently ratchets up state pension spending over time.

Chart shows Real-terms increase in value of the state pension since year 1 over an illustrated timescale, for the new and the old triple lock. Title states: "The state pension will still grow under the new triple lock, but will no longer permanently ‘ratchet up’ in value relative to earnings."

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Reposted by The Institute for Fiscal Studies

Peter Levell @peterlevell.bsky.social · 02/10/2026

If I'd known this event was going to get 16k+ views on youtube, I would probably put a comb through my hair that morning! www.youtube.com/watch?v=6tvC... Watch Bobbie Upton's presentation on Britain's high electricity prices here

youtube.com

What should we do about high electricity prices in the UK?

YouTube video by Institute for Fiscal Studies

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The Institute for Fiscal Studies @theifs.bsky.social · 02/10/2026

WATCH NOW: Sharing income tax revenues with England’s mayors: the issues and options 🖥️ Watch our event live here: youtube.com/live/wEJ2J7P... ❓️ Ask questions here: app.sli.do/event/4W56EY... Funded by CIPFA and @nuffieldfoundation.org

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The Institute for Fiscal Studies @theifs.bsky.social · 02/10/2026

📗 Read the full report, written by @martintb-ifs.bsky.social, Kate Ogden and David Phillips, here: ifs.org.uk/publications... 🎤 We're holding an online event to discuss this report today at 10am. You can sign up here: ifs.org.uk/events/shari...

ifs.org.uk

https://ifs.org.uk/publications/issues-and-options-sharing-tax-revenues-englands-regional-mayors-0

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The Institute for Fiscal Studies @theifs.bsky.social · 02/10/2026

NEW: The government has committed to sharing a portion of income tax revenues with mayors. But how will this work? Our new report, published as part of the IFS Green Budget 2026 with support from CIPFA and @nuffieldfoundation.org, examines the key choices and trade-offs the Chancellor faces ⬇️

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The Institute for Fiscal Studies @theifs.bsky.social · 01/10/2026

We'll be presenting our analysis of the UK economic outlook, the public finances and choices facing the Chancellor ahead of the Budget at our IFS Green Budget 2026 event on Wed 14 October, funded by @nuffieldfoundation.org and Barclays. ➡️ Sign up to attend here: ifs.org.uk/events/ifs-g...

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The Institute for Fiscal Studies @theifs.bsky.social · 01/10/2026

"The new triple lock is not going to put pensioners into poverty. Pensions will still rise in line with average earnings." 🎙️ @helenmiller.bsky.social explains how the new triple lock will work in our latest podcast: has the triple lock been fixed? 🎧 Listen here: ifs.org.uk/articles/has...

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The Institute for Fiscal Studies @theifs.bsky.social · 30/09/2026

"Because of how uncertain the old triple lock was, it could save anywhere between £4bn and £20bn by the end of the next decade" 🎙️ Jonathan Cribb explains the difficulties in knowing how much the changes to the triple lock will save, in our latest podcast: has the triple lock been fixed?

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The Institute for Fiscal Studies @theifs.bsky.social · 30/09/2026

NEW PODCAST: Has the triple lock been fixed? 🎙️ @helenmiller.bsky.social explains why the triple lock is an unpredictable way to increase the state pension, in our new podcast about the Government's announcement, out now:

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The Institute for Fiscal Studies @theifs.bsky.social · 30/09/2026

➡️ Read the full comment here: ifs.org.uk/articles/sav...

Quote from IFS Deputy Director Jonathan Cribb. The quote reads: "There has been a lot of debate about whether this reform can fund a substantial package of social care reform. However, the key point is not how large these savings are compared to the cost of providing social care.

Instead, the crucial thing to understand is that the triple lock reform prevents unfunded increases in state pension expenditure from 2030 onwards. Cancelling an unfunded increase does not free up funds to pay for a new government commitment. Therefore tax rises or other spending cuts will be needed to pay for social care."

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The Institute for Fiscal Studies @theifs.bsky.social · 30/09/2026

NEW: Savings from triple lock reform could be large but will not be able to fund social care. In a new comment, IFS Deputy Director Jonathan Cribb sets out potential savings from triple lock reform.

Quote from IFS Deputy Director Jonathan Cribb. The quote reads: "The government has estimated that their reform to the triple lock will save £15 billion per year by 2039–40 . That number partly reflects inflation over the next 13 years. In today’s terms, the estimated saving is £11 billion per year. However, the saving is very uncertain, because of how unpredictable the old triple lock is, and new IFS analysis shows it could reasonably be anywhere between £4 billion and £20 billion."

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