lnstitute for Fiscal Studies - IFS Report R301 - The context for

This would be © The Institute for Fiscal Studies, February 2024 £ billion 7 The context for the March 2024 Budget £11 billion below the £124 billion forecast by the OBR in the November 2023 Autumn Statement and £18 billion below the forecast last March. [...] Under the revised 2024 projection, the population would grow at a faster rate of 1% in the short term – causing a one-off increase in size – but more importantly for the outlook for the public finances, the rate of growth is also expected to settle at a higher level of around 0.5% over the medium term. [...] If the OBR were to upgrade its projections for economic growth in tandem with the ONS’s upwards revision to growth in the adult population projection, the impact on the size of the economy could also be substantial: if no other countervailing changes were made, the new projections might add 0.4% to growth this year and next, declining to 0.1% in 2029. [...] Indeed, between the March and November 2023 forecasts, the addition of 2028–29 to the forecast horizon led to borrowing in the final year of the forecast being over £10 billion lower, with this figure being driven by the tight spending growth pencilled in for that year. [...] This increase is fuelled by freezes to thresholds in the personal direct tax system and the increase is fuelled by freezes to thresholds in the personal direct tax system and the big increase in the main rate of corporation tax that was implemented in April 2023.