IFS Green Budget - October 2024

However, the Green Budget remains the landmark publication of the IFS year, framing public debate on the state of the public finances ahead of the Chancellor’s Budget and Spending Review. [...] If the challenge for the United Kingdom is to reset the terms of the relationship between a caring and productive society, the areas on which Green Budget has focused this year identify the pressure points in that equation. [...] We then turn to the global and domestic outlook for activity, the labour market, the outlook for inflation and the choices facing the Bank of England. [...] Given the poor state of many public services, the ambitions and commitments in the Labour manifesto, and the scale of the public sector pay awards announced over the summer, it seems inevitable that the previous government’s spending plans will need topping up. [...] Broadly, it is better-paid public sector workers who have seen bigger falls in pay, with 7 The prison service is on the front line of one of the most doctors’ pay slipping from the 95th percentile of the salient challenges currently facing the public sector hourly pay distribution to close to the 90th percentile – the severe shortage of prison places.