Spring Budget 2020 - our overnight analysis is now live on our website. Here's a long thread of the some of the highlights. All 37 charts, and 59 pages of analysis, are available here resolutionfoundation.org/publications/s…
First, the @OBR_UK managed to be both incredibly grim, and unbelievably optimistic in its revised economic outlook. GDP is projected to rise by 7.3% over the forecast period - the second worst OBR forecast on record. And that's before the impact of coronavirus is included... 
And of course, the economic outlook delivered yesterday is already well out of date given the escalation of the coronavirus outbreak. Measures of econominc and policy uncertainty have risen sharply in recent weeks.
Taken together, all indicators show that coronavirus will lead to a significant deterioration in the economic outlook - with the risk of a recession rising as a result...
So, yes the @OBR_UK economic outlook was both grim and overly optimistic, but there was a far more positive outlook for employment, which was revised up yet again. Recent history suggests this extra jobs optimism is fully justified
@OBR_UK The OBR revised economic outlook didn't massively change the public finances outlook. The bulk of the £46 billion of extra borrowing this year (2020-21) comes from extra government spending (on tackling coronavirus and day-to-day public service spending)
@OBR_UK Looking further ahead into the parliament (2023-24), departmental spending is set to be £32 billion higher, and investment £14 billion higher. This is partially offset a small net increase in tax reveneues, raising £9 billion. The overall picture remains...more borrowing
@OBR_UK Even ignoring the £12 billion package of measures to tackle coronavirus, the extra spending announced in yesterday's Budget have contributed the lion's share of the biggest increase in public sector net borrowing between OBR forecasts on record.
@OBR_UK It's worth noting though that while yesterday's fiscal loosening is huge by recent historic comparisons, it's small if you take a longer view back to the financial crisis or Black Wednesday...
@OBR_UK So, while borrowing over the next five years is well below the levels reached at the height of the crisis, it is forecast to be above the average level of borrowing seen under Gordon Brown.
@OBR_UK Despite the significant extra borrowing announced in yesterday's Budget, the Chancellor is still on course to meet his target of balancing the current budget in 2022-23
@OBR_UK However, the level of fiscal headroom against the current balance is historically low at just £12 billion. With these figueres not including the Chancellor's coronavirus response, in practice the government is very close to breaking this fiscal rule.
@OBR_UK Turning to the Chancellor's response to the coronavirus, the Chancellor announced a welcome package of measures to support firms and the wider economy. Support for workers affected was far less comprehensive however...
@OBR_UK RF analysis shows that the generosity of support for those self-isolating or off sick is low. Many workers face losing between 70% and 74% of their primary income - a huge living standards shock
Turning to the government's overall spending package, the UK is set for historically large spending increases - with Total Managed Expenditure (TME) hitting £1 trillion for the first time ever...
Our estimate, based on the OBR's forecasts, is for departmental spending to rise by £203 billion over the next five years - encompassing £61bn of extra departmental capital spending and £142 billion of additional day-to-day departmental spending
This is a LOT of extra spending. And given the Chancellor's lack of appetite for significant or far-reaching tax reforms, it is funded primarily by extra borrowing
The (well-trailed) increase in capital spending is indeed significant. Whatever metric you use, public investment is set to rise well above pre-2010 levels
This increase in capital spending well take public sector net investment above the post-war average...
But while the government is committed to increasing public investment - the majority of that funding is unallocated. Spending this efficiently will hold the key to making a success of the 'leveling up' agenda
More surprising than the extra capital spending was the big increase in day-to-day departmental spending ahead of the forthcoming Spending Review. But measured on a per capita basis, departmental spending in 2024-25 is still 3 per cent below 2009-10 levels.
And these departmental spending increases will not fully reverse austerity for non-protected departments such as justice and transport, whose budgets are still on course to remain a quarter and a half below their pre-2010 levels respectively.
If the government wants to reverse austerity for day-to-day public services (as it has done for capital spending) it won't come cheap. Fully reversing this austerity would cost a further £41bn in the final year of the parliament.
And while the Chancellor decisively turned a page on austerity in yesterday's big spending Budget, austerity for family budgets in the form of social security cuts are still being rolled out over this parliament.
Social security barely featured in yesterday's Budget. But it may have as 70% of eventual Universal Credit claimants are moved onto the new system during this parliament. Our analysis shows the rollout will produce a complex mix of winner and losers which vary from place-to-place
Bringing together all the main tax and benefit changes announced since 2015, including yesterday's National Insurance cut and fuel duty, the overall picture remains regressive , with the richest half of household gaining overall, and the poorest households losing the most.
Yesterday's Budget was a tax-raising one overall, but key tax policy decisions have been deferred. There was however a welcome scaling back of Entrepreneurs Relief (though it remains costly, and skewed to the very rich)
Looking at the specific tax measures announced at Budget 2020, there were relatively progressive (though not enough to offset to highly regressive post-2015 tax and benefit changes)
And finally, while yesterday's first Budget of the new parliament was exceptional in so many ways, it was a tax raising one, with a net tax rise of £9 billion pencilled in for 2024-25, and £32 billion over the forecast period. Some Budget traditions never change....
You can read our full overnight analysis of #Budget2020 - written by the RF team - here resolutionfoundation.org/publications/s…
