Spring Statement 2018

Today’s Spring Statement was expressly not a ‘budget’; it contained no new spending or tax policy announcements. Instead, it was an opportunity for the Chancellor to update parliament on the latest UK economic and fiscal forecasts.

It is only three and a half months since the Autumn Statement in November. The big statements then were about the major downward revisions to the forecasts for UK economic growth.

Today there was a smidgeon of relatively better news on the economy. GDP growth in 2017 turned out to be slightly higher than the OBR had expected, and it has also revised up its forecasts for 2018. But these upward revisions in the early years of the forecast are mirrored by slight declines in later years (the OBR has effectively reassessed its view of where we are in the ‘economic cycle’).

Moreover, the upward revisions are nowhere near sufficient to offset the downward adjustments in November (see Chart). UK growth of 1.5% in 2018 is still forecast to lag EU and US growth (forecast at 2.3 and 2.9% respectively by the OECD).Continue reading

March 13, 2018

What to look out for in today’s budget

Despite a tumultuous referendum result, huge revisions to economic and fiscal forecasts, and a revised fiscal target, one thing that has so far barely changed in the last 18 months is the government’s plans for departmental spending.

As a result, the outlook for the Scottish Government’s block grant for discretionary day-to-day spending has not (yet) changed significantly since Osborne set his last Budget in March 2016. The outlook for 2018/19 and 2019/20 has always looked challenging with cuts to the block grant of just under £400 million in each year.

block grant outlook

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UK Budget: what will it mean for the Scottish Budget?

When the Chancellor Phillip Hammond sits down after delivering his Budget on Wednesday, this will signal the start of the final three weeks of preparations before the Scottish budget is launched on December 14th.

But how will the decisions and announcements made on Wednesday effect the options and choices available to Cabinet Secretary for Finance Derek Mackay in his budget three weeks later?

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November 20, 2017