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NEW: Next week the Chancellor will turn on the spending taps - our preview of what it could mean is out today resolutionfoundation.org/publications/b…
Significant increases in spending will mark a turning point in our political and economic debates after an unprecedented decade of austerity. Public services' need for a change is very real... 
It's a political no brainer - an election has reached the really quite likely point, and the austerity fatigue has set in - 60% of us want more spending not less. No Conservative wants to re-run the 2017 election rows on schools and police funding
The economics are also mean the Chancellor can borrow to increase spending if he wishes - the deficit is at a 17 year low and the cost of government borrowing has fallen again recently
So the Chancellor can borrow to spend - but he probably can't do so while delivering on his promise for this spending round to take place "within the current
fiscal rules.”
fiscal rules.”
Yes on the latest @OBR_UK forecasts there is around £14bn of headroom for extra borrowing in 2020-21 - but latest here means back in March.... Since then changes to the fiscal and economic outlook mean that headroom is likely to be much lower
Firstly that's because the spending taps were turned on before Boris Johnson arrived in No10 - borrowing so far this year has been coming in significantly higher than expected as a result. This could knock £5bn from the Chancellor's headroom
On the economic side a global economic slowdown on top of Brexit uncertainty has meant economic forecasts being downgraded for next year - again this could mean £5bn less headroom (on average an autumn forecast deterioration = £10bn)
So the Chancellor has more like £4bn than £14bn headroom if he really wanted to announce spending consistent with his fiscal rule. The only challenge is the Prime Minister has already announced £6bn - with more to come next week...
So yes the Chancellor can afford to borrow more to turn on the spending taps next week - and will do so. It's just much less clear he can (or should) pay the price in economic credibility of saying he's committed to fiscal rules while announcing policy that breaks them
The timing of announcing how much we can afford to spend before knowing what Brexit we're heading for obviously works politically but makes little economic sense - we all probably look at our income before deciding how much to spend...
Full report with @dan_tomlinson_ (who deserves the credit for all the interesting bits) is available here resolutionfoundation.org/app/uploads/20…
