Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world 2025 at 11:10 AM EDTBookmarkSaveTakeaways NEWActivity at US service providers accelerated in April after a slumping in the prior month while materials prices increased in response to escalating tariffs The Institute for Supply Management’s index of services increased 0.8 point to 51.6 last month and the latest figure was stronger than all but one forecast in a Bloomberg survey of economists The VGChartz sales comparison series of articles are updated monthly and each one focuses on a different sales comparison using our estimated video game hardware figures The charts include comparisons between the PlayStation 5 There are articles based on our worldwide estimates This monthly series compares the aligned worldwide sales of the PlayStation 5 and PlayStation 4 The PlayStation 5 launched in November 2020 while the PlayStation 4 launched in November 2013 This does mean the holiday periods for the two consoles do lineup Gap change over last 12 months: 759,524 - PS4 March 2025 is the 53rd month the PlayStation 5 has been available for the gap grew in favor of the PlayStation 4 when compared to the aligned launch of the PlayStation 5 by 0.20 million units the PS4 has outsold the PS5 by 0.76 million units The PS4 is currently ahead of the PS5 by 2.21 million units The PS5 has sold 75.28 million units in 53 months Month 53 for the PS5 is March 2025 and for the PS4 is March 2018 The PS4 crossed 80 million units sold worldwide in month 56 The PS4 sold 117.20 million units lifetime The PS5 is 41.92 million units behind lifetime PS4 sales Sony being able to hold almost the same sales for PS4 and PS5 is kinda impressive Those 2 million consoles gap is pointless with how successful the PS5 is Sony played it really safe after the really painful PS3 era Luckily for Sony MS botched the hardware of the Xbone really bad trying to cut costs to include the very expensive kinect 2 It made the PS4 look much more appealing than it actually was '+n.escapeExpression("function"==typeof(o=null!=(o=r(e,"eyebrowText")||(null!=l?r(l,"eyebrowText"):l))?o:n.hooks.helperMissing)?o.call(null!=l?l:n.nullContext||{},{name:"eyebrowText",hash:{},data:t,loc:{start:{line:28,column:63},end:{line:28,column:78}}}):o)+" \n '+(null!=(o=c(e,"if").call(r,null!=l?c(l,"cta2PreText"):l,{name:"if",hash:{},fn:n.program(32,t,0),inverse:n.noop,data:t,loc:{start:{line:63,column:20},end:{line:63,column:61}}}))?o:"")+"\n"+(null!=(o=(c(e,"ifAll")||l&&c(l,"ifAll")||n.hooks.helperMissing).call(r,null!=l?c(l,"cta2Text"):l,null!=l?c(l,"cta2Link"):l,{name:"ifAll",hash:{},fn:n.program(34,t,0),inverse:n.noop,data:t,loc:{start:{line:64,column:20},end:{line:70,column:30}}}))?o:"")+" have taken part in the annual "March of the Living" through former Nazi concentration camp The march follows a 3km (1.86 miles) route to the crematorium of Auschwitz-Birkenau as participants pay tribute to the millions of Jews who died in the Holocaust and call for an end to antisemitism and intolerance Many of those on the march carried Israeli flags and called for the release of hostages still held by Hamas in Gaza Israel's prime minister Isaac Herzog joined the crowds as they made their way through the camp ShareSaveRos Atkins on... What's in the US-Ukraine resources deal?The BBC's analysis editor looks at what has been agreed in the much-anticipated agreement. If you were Australia PM how would you handle the US and China?Ahead of Australia's election, the BBC asked voters about the increasingly fraught US-China relationship. Watch: Moment Columbia student Mohsen Mahdawi is releasedMahdawi was among multiple international students and graduates detained after their involvement in the protest movement against the war in Gaza. 'Our community is grieving,' say Vancouver festival organisersOrganisers of the festival where a car ramming attack killed 11 people say they are "heartbroken". 'I'm voting for the first time after fleeing a dictatorship'Ghayda and her husband Ahmad say they could never discuss politics in Syria - now, they will vote in Canada's election. Viral videos claim luxury bags are made in China, is it true?BBC Verify's Jake Horton looks into the truth behind the claims, and what we know about how luxury goods are made. 'A number of businesses in limbo' in China after US tariffs on importsBBC China correspondent Laura Bicker has been speaking to companies at the world's longest running import-export fair. Watch: Ballerina jailed in Russia reunites with family in USThe Russian-American citizen was released in a prisoner swap between Moscow and Washington. 'Our unity is our strength' - EU responds to Trump's tariffsEU chief Ursula von der Leyen has vowed a united response to US tariffs, warning of further countermeasures if negotiations fail. 'You don't have the cards' - How to play poker against TrumpThe BBC's Anthony Zurcher takes a closer look at the US president's negotiation strategy with top world leaders. Carney meets Macron on first foreign visit as PMCarney described Canada as the "most European of non-European countries". Watch: Dozens of pro-Palestinian protesters arrested at Trump Tower sit-inThe demonstrators were demanding the release of detained activist Mahmoud Khalil, who is facing deportation. 'Do you feel guilty?' - Watch BBC reporter challenge smuggler as he follows lethal drugs tradeQuentin Sommerville gains access to a cartel's operation as the US grapples with hundreds of thousands of opioid deaths. 'Ireland has entire US pharmaceutical industry in its grasp' - TrumpUS President Donald Trump has raised a "massive" trade imbalance with Ireland and accused the European Union of treating the US "very badly". Enemies no more? How Russia's rhetoric about the US is changingBBC Russia editor Steve Rosenberg explores how Moscow has warmed to Trump's America. Creator of viral AI Trump Gaza video warns of possible dangersThe video apparently satirising a proposal to "take over" the Gaza Strip was shared by the US president on social media. Ros Atkins on... President Trump's history with UkraineThe BBC's analysis editor takes a look at President Trump's history with Ukraine - and how it set the stage for this week's events. Can Europe fill the gap now the US has paused military support for Ukraine?America has withdrawn its military support for Ukraine, how big of a hole does it leave? Mineral deal 'ready to sign', says ZelenskySpeaking to reporters after a summit of European leaders in London, Ukrainian President Zelensky reflects on the public White House showdown. The UNDAC Advisory Board Meeting will be held on Thursday Organized alongside the Humanitarian Networks and Partnerships Week (HNPW) this annual gathering brings together UNDAC National Focal Points It provides a unique forum to exchange updates on the UNDAC system and collectively shape the future direction of UNDAC’s global disaster response efforts by providing advice to OCHA This paper presents an overview of the UNDAC Advisory Board for 2025 in order for participants to arrive well-prepared to contribute to the discussions It reviews the activities carried out by the UNDAC system in both 2024 and 2025 and encompasses UNDAC deployments for emergency responses and preparedness missions along with trainings conducted for our close partners worldwide it provides insights into the primary UNDAC partnerships that the OCHA Emergency Response Section (ERS) has bolstered over the past year highlighting key humanitarian organizations The final meeting agenda will be distributed in advance (pdf) الطلب على السفر الجوي يرتفع بنسبة 3.3% في شهر مارس Geneva - The International Air Transport Association (IATA) released data for March 2025 global passenger demand for air travel with the following highlights: “Passenger demand grew by 3.3% year-on-year in March a slight strengthening from the 2.7% growth reported for February outpaced the demand expansion leading to a load factor decline from record highs to 80.7% systemwide There remains a lot of speculation around the potential impacts of tariffs and other economic headwinds on travel While the small decline in demand in North America needs to be watched carefully March numbers continued to show a global pattern of growth for air travel That means the challenges associated with accommodating more people who need to travel—specifically alleviating supply chain problems and ensuring sufficient airport and air traffic management capacity—remain urgent,” said Willie Walsh 1) % of industry RPKs in 2024    2) Year-on-year change in load factor    3) Load Factor Level International RPK growth slowed to 4.9% in March year-on-year from the 5.9% reported for February and from the 12.5% reported in January This slowdown since January reflects in large part the final normalization of year-on-year demand comparisons post-COVID Asia-Pacific was the strongest performer among regions with 9.9% growth Asia-Pacific airlines reported a 9.9% year-on-year increase in demand and the load factor was 84.1% (-1.3 ppt compared to March 2024) European carriers had a 4.9% year-on-year increase in demand and the load factor was 78.2% (-1.5 ppt compared to March 2024) Middle Eastern carriers saw a -1.0% year-on-year decline in demand and the load factor was 74.6% (-2.9 ppt compared to March 2024) The decline in demand is likely related to the timing of Ramadan which impacts travel patterns North American carriers saw a -0.1% year-on-year fall in demand and the load factor was 83.0% (-1.8 ppt compared to March 2024) While demand had a second consecutive month of year-on-year contraction it is important to note that this is an improvement on the -1.5% decline reported for February Latin American airlines saw a 7.7% year-on-year increase in demand The load factor was 80.9% (-3.3 ppt compared to March 2024) African airlines saw a 3.3% year-on-year increase in demand The load factor was 70.1% (-0.2 ppt compared to March 2024) Domestic air travel posted a marginal 0.9% gain weighed down by declines in the US and Australian markets Brazil and India reported the strongest growth at 8.9% and 11.0% respectively Australia (-1.2%) and the US (-1.7%) reported declines The load factor fell -1.3 ppt as domestic capacity expanded 2.5% 1) % of industry RPKs in 2024    2) year-on-year change in load factor    3) Load Factor Level  Note: the six domestic passenger markets for which broken-down data are available account for approximately 30.2% of global total RPKs and 79.1% of total domestic RPKs > View the March 2025 Air Passenger Market Analysis (pdf) Corporate CommunicationsTel: +41 22 770 2967Email: corpcomms@iata.org - RPK: Revenue Passenger Kilometers measures actual passenger traffic - ASK: Available Seat Kilometers measures available passenger capacity - PLF: Passenger Load Factor is % of ASKs used     www.airlines.iata.org We use cookies to give you the best experience on our website. We also use cookies for advertising purposes. Please see our privacy policy and cookies policy for complete information Aspo to publish its Interim Report for January-March 2025 on May 12 2025 Aspo Plc will publish Interim Report for January-March 2025 on Monday The interim report will be presented by CEO Rolf Jansson and CFO Erkka Repo The event will be held in English, and it can also be followed as a live webcast at https://aspo.events.inderes.com/q1-2025 A recording of the event will be available after the event at the company’s website aspo.com Susanna Hietanen, Communications Director, Aspo Plc, tel. +358 50 3595 701, susanna.hietanen@aspo.com Aspo creates value by owning and developing business operations sustainably and in the long term. Our companies aim to be market leaders in their sectors. They are responsible for their own operations, customer relationships and the development of these aiming to be forerunners in sustainability. Aspo supports its businesses profitability and growth with the right capabilities. Aspo Group has businesses in 17 different countries, and it employs approximately 800 professionals.  Free NewsletterUK Join the newsletter that everyone in finance secretly reads RBC predicts a brighter turn for Canada’s economy this March, with a trade surplus expected as exports grow following US tariff relief on certain Canadian goods. For markets: Riding the waves of economic change. This shift back to a trade surplus creates an optimistic outlook for Canada’s export industries, especially those aligning with USMCA rules. However, the labor market's difficulties, marked by rising unemployment and fewer job openings, may hinder economic recovery, prompting investors to tread carefully. The bigger picture: Navigating global trade currents. These events underscore the complex interplay of international trade deals and their economic effects. While tariff discussions and compliance prompt immediate shifts in trade balance, global economic trends and policy changes hold the key to long-term stability. As major economies adjust post-pandemic, Canada’s scenario provides insights into navigating these global currents. Theodora Lee Joseph, CFA The Great Wealth Transfer Is Coming – Here’s How To Profit From ItStéphane Renevier, CFA Markets Could Pick A Direction This Week – Here's WhyJonathan Hobbs, CFA Why GameStop Might Actually Be Worth A Look Right NowTheodora Lee Joseph, CFA Political Risk Is Part Of A Stock’s Value Now – And, No, You Can’t Afford To Tune It OutTheodora Lee Joseph, CFA Apple And Amazon’s Results Were Sturdy, But Their Future Looks A Little Less SoREAD NEXTNews Skechers Goes Private In $9.4 Billion Deal With 3G CapitalFinimize Newsroom Edgewell Braces For 2025 Challenges As Tariffs BiteFinimize Newsroom A Defensive Portfolio Prepared For The Wealth Effect’s ReversalStéphane Renevier, CFA One Common Hedge-Fund Trade Could Bring Down Financial Systems – And It Nearly Backfired This WeekRussell Burns Coinbase’s Steep Drop Might Make It Interesting, But It Hasn’t Made It CheapRussell Burns Tariffs Are Spooking Investors Into Panic-Selling – Here’s What to Do InsteadReda Farran, CFA Threats Are Rising. So Here’s How To Invest In Cybersecurity.Theodora Lee Joseph, CFA Apple And Amazon’s Results Were Sturdy, But Their Future Looks A Little Less SoTheodora Lee Joseph, CFA Egypt's net foreign assets jumped by $4.9 billion in March, central bank data showed, apparently boosted by the approval of the fourth review of the country's IMF programme. Net foreign assets climbed to the equivalent of $15.08 billion from $10.18 billion at the end of February, according to Reuters calculations based on official central bank currency exchange rates. The International Monetary Fund in early March approved the disbursement to Egypt of $1.2 billion after completing its review of the country's $8 billion economic reform programme. It also approved a request for a $1.3 billion arrangement under the IMF's resilience and sustainability facility. Foreign investors were significant purchasers of Egyptian pound treasury bills after the approval and as one-year bills acquired after the March 2024 IMF agreement matured, two bankers said. Egypt had been using foreign assets, which include assets held by both the central bank and commercial banks, to help prop up its currency since as long ago as September 2021. Net foreign assets turned negative in February 2022 and only returned to positive territory in May last year. Foreign assets increased in February at both the central bank and commercial banks, while foreign liabilities rose at the central bank but declined at commercial banks. Notifications can be managed in browser preferences. IndependentLightDark{"modes":[{"id":"light","name":"Light","value":"#ffffff"},{"id":"dark","name":"Dark","value":"#000000"}]}Menu{"children":"Menu"}Thank you for registeringPlease refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in Members of the Ukrainian armed forces taking part in a procession rehearsal ahead of VE Day Translations:  Hausse de 4,4 % du fret aérien en mars (pdf) Demanda por carga aérea cresce 4,4% em março (pdf) Geneva - The International Air Transport Association (IATA) released data for March 2025 global air cargo markets showing: It is possible that this is partly a front-loading of demand as some businesses tried to beat the well-telegraphed 2 April tariff announcement by the Trump Administration The uncertainty over how much of the 2 April proposals will be implemented may eventually weigh on trade the lower fuel costs—which are also a result of the same uncertainty—are a short-term positive factor for air cargo within the temporary pause on implementation we hope that political leaders will be able to shift trade tensions to reliable agreements that can restore confidence in global supply chains,” said Willie Walsh Several factors in the operating environment should be noted:  (*1) % of industry CTKs in 2024    (*2) Year-on-year change in load factor     (*3) Load factor level Asia-Pacific airlines saw 9.6% year-on-year demand growth for air cargo in March North American carriers saw a 9.5% year-on-year increase in demand growth for air cargo in March European carriers saw a 4.5% year-on-year increase in demand growth for air cargo in March Middle Eastern carriers saw a -3.2% year-on-year decrease in demand growth for air cargo in March It’s possible the weakness in this market is due to year-on-year comparison with the strong growth at the start of 2024 resulting from disruption to Red Sea maritime freight Latin American carriers saw 5.8% year-on-year demand growth for air cargo in March African airlines saw a -13.4% year-on-year decrease in demand for air cargo in March Capacity increased by 10.5% year-on-year.  Trade Lane Growth: The Europe-North America route was the busiest trade lane in March possibly encouraged by front-loading shipments ahead of potential increased tariffs Europe-Middle East and Africa-Asia were the only trade lanes to decline in March > View March 2025 Air Cargo Market Analysis (pdf) ESTASpain received around 6.6 million international tourists in March 2025, 3.8% more than in the same month of 2024 and setting a new record for the month. Among international visitors in March, the UK ranked first with over 1.2 million tourists, growing by 3.6% compared to last year. In contrast, arrivals from Germany fell by 1.4% to 896,441, and France recorded a 3.5% decrease, totaling 763,153 visitors. In the first three months of 2025, the number of tourists visiting Spain increased by 5.7% to nearly 17.1 million. Copyright © 2025 FactSet Research Systems Inc.© 2025 TradingView We use some essential cookies to make this website work We’d like to set additional cookies to understand how you use GOV.UK remember your settings and improve government services We also use cookies set by other sites to help us deliver content from their services You have accepted additional cookies. You can change your cookie settings at any time You have rejected additional cookies. You can change your cookie settings at any time Freedom of Information releases and corporate reports Please note this data shows what HM Land Registry has been able to process during the time period covered and is not necessarily a reflection of market activity HM Land Registry completed 1,974,155 applications in March compared with 1,806,500 in February 2025 and 1,865,589 last March 2024 1,097,576 were applications for an official copy of a register compared with 1,039,212 in February Access the full dataset on our Use land and property data service Transaction Data is published on the 15th working day of each month The April 2025 data will be published at 11am on Thursday 22 May 2025 Don’t include personal or financial information like your National Insurance number or credit card details Cookies are small files stored on your device when you visit a website We would like to set additional cookies to remember your settings and understand how you use the site Source: Consumer price inflation from the Office for National Statistics The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 3.4% in the 12 months to March 2025 down from 3.7% in the 12 months to February (Figure 1) compared with a rise of 0.6% in March 2024 The owner occupiers’ housing (OOH) costs component of CPIH rose by 7.2% in the 12 months to March 2025 down from 7.5% in the 12 months to February compared with a 0.6% increase a year earlier The Consumer Prices Index (CPI) rose by 2.6% in the 12 months to March 2025 down from 2.8% in the 12 months to February Figure 2 shows the contributions from the 12 divisions to the change in the annual Consumer Prices Index including owner occupiers’ housing costs (CPIH) inflation rate between February and March 2025 These sum to the change in the annual rate between the latest two months The slowing in the rate into March 2025 reflected downward contributions from seven divisions partially offset by upward contributions from two divisions The largest downward contributions came from recreation and culture The only large upward contribution came from clothing and footwear Overall prices in the recreation and culture division rose by 2.4% in the 12 months to March 2025 down from 3.4% in the 12 months to February The rate in March was the lowest observed since October 2021 The slowing in the annual rate was the result of relatively small downward effects from a variety of the more detailed classes where prices fell this year but rose a year ago The 12-month inflation rate for housing and household services was 5.1% in March 2025 There was a downward effect from owner occupiers’ housing (OOH) costs which rose by 7.2% in the 12 months to March 2025 Overall prices in the transport division rose by 1.2% in the 12 months to March 2025 down from 1.8% in the 12 months to February The slowing in the annual rate reflected a large downward effect from motor fuels The average price of petrol fell by 1.6 pence per litre between February and March 2025 to stand at 137.5 pence per litre down from 144.8 pence per litre in March 2024 Diesel prices also fell by 1.6 pence per litre in March 2025 to stand at 144.8 pence per litre down from 154.1 pence per litre in March 2024 These movements resulted in overall motor fuel prices falling by 5.3% in the 12 months to March 2025 compared with a fall of 2.5% in the 12 months to February The 12-month inflation rate for restaurants and hotels was 3.0% in March 2025 The 12-month rate in March was the lowest observed since July 2021 The easing in the rate between February and March 2025 was caused by a downward contribution to change from accommodation services where prices rose this year by less than a year ago Food and non-alcoholic beverages prices rose by 3.0% in the 12 months to March 2025 down from 3.3% in the 12 months to February There was a small downward effect from confectionery This was partially offset by a small upward effect from milk where prices rose this year but fell a year ago food and non-alcoholic beverages prices were unchanged in March 2025 compared with a rise of 0.2% in March 2024 The overall easing in the inflation rate was partially offset by an upward effect from clothing and footwear Prices rose by 1.1% in the 12 months to March 2025 compared with a fall of 0.6% in the 12 months to February (Figure 5) The rise in the rate partially reverses the easing seen between January and February Prices usually rise in March as spring fashions continue to enter the shops and the increase this year was relatively large following an unusual fall in prices into February The price movements between January and March this year reflected changes in the proportion of discounted prices in the datasets This proportion rose between January and February 2025 whereas it has historically fallen between these months The proportion then fell by more than is usual into March 2025 The rise in the annual rate was mainly the result of a large upward effect from garments Figure 6 shows the 12-month inflation rates for the Consumer Prices Index including owner occupiers’ housing costs (CPIH) series for all goods and all services alcohol and tobacco (often referred to as core CPIH) The CPIH inflation rate is added for comparison The CPIH all services index rose by 5.4% in the 12 months to March 2025 down from 5.7% in the 12 months to February There were large downward contributions to the change in the annual rate from housing services principally from owner occupiers’ housing (OOH) costs; and from package holidays and accommodation The CPIH all goods index rose by 0.6% in the 12 months to March 2025 down from 0.8% in the 12 months to February The largest downward contributions to the change in the annual rate came from recreational goods and energy partially offset by an upward contribution from clothing and footwear goods The core CPIH annual inflation rate was 4.2% in March 2025 Figure 7 shows the extent to which the distinct categories of goods and services have contributed to the overall annual CPIH inflation rate over the last two years The contribution of each category to the annual rate depends on the price movement in that category as well as its weight The contributions from all divisions to the annual CPIH inflation rate were positive in March 2025 The largest came from housing and household services The contribution from housing and household services eased from 1.57 to 1.51 percentage points between February and March 2025 The contribution from restaurants and hotels also eased from 0.40 to 0.35 percentage points This was the smallest contribution from this division since January 2022 Figure 8 shows the contributions from owner occupiers’ housing (OOH) costs and Council Tax to the annual CPIH inflation rate in the context of wider housing-related costs The Consumer Prices Index (CPI) differs from the CPIH because it does not include these two components The annual contribution from OOH slowed for a second month from 1.31 percentage points in January 2025 It had previously risen for 13 consecutive months to January 2025 OOH was the main driver of the reduced contribution from housing and household services to the annual CPIH inflation rate in March 2025 Figure 9 shows annual CPI inflation for the UK compared with the European Union (EU) average and selected Group of Seven (G7) countries While the UK CPI is produced on a comparable basis with EU countries the United States Harmonised Index of Consumer Prices (HICP) differs in some respects (see Footnote 1 to Figure 9) The UK’s CPI inflation rate of 2.6% was above the first (or “flash”) estimate of inflation for France (0.9%) and Germany (2.3%) in the 12 months to March 2025 Figure 10 shows the 12-month inflation rates for the CPI all goods and all services series alcohol and tobacco (often referred to as core CPI) The headline CPI inflation rate is added for comparison The CPI all services index rose by 4.7% in the 12 months to March 2025 down from 5.0% in the 12 months to February The CPI all goods index rose by 0.6% in the 12 months to March 2025 Core CPI rose by 3.4% in the 12 months to March 2025 down slightly from 3.5% in the 12 months to February As with the all-items annual inflation rates, the drivers of CPIH and CPI goods and services inflation are the same (with the exception of owner occupiers’ housing (OOH) costs and Council Tax, which are excluded from CPI). The drivers are discussed in more detail in Section 4: Latest movements in CPIH inflation Figure 11 shows how each of the main groups of goods and services contributed to the change in the annual CPI inflation rate between February and March 2025 The easing in the rate into March 2025 reflected downward contributions from seven divisions partially offset by upward contributions from three divisions The largest downward contribution came from recreation and culture upward contribution came from clothing and footwear Although the sizes of the contributions differ from CPIH the main drivers to the change are the same where they are common to both measures Figure 12 shows the extent to which the distinct categories of goods and services have contributed to the overall annual CPI inflation rate over the last two years The CPIH includes extra housing components not included in the CPI This can result in the largest contributions to the annual CPI and CPIH inflation rates coming from different divisions the largest-contributing division to CPI was restaurants and hotels (0.43 percentage point contribution to the CPI rate) whereas the largest-contributing division to CPIH was housing and household services (1.51 percentage points to the CPIH rate) OOH costs had a large upward contribution to housing and household services in CPIH but are excluded from CPI Consumer price inflation tables Dataset | Released 16 April 2025 Measures of monthly UK inflation data including the Consumer Prices Index including owner occupiers’ housing costs (CPIH) Consumer Prices Index (CPI) and Retail Prices Index (RPI) These tables complement the consumer price inflation time series dataset Please note that from publication on 26 March 2025 we have published fewer tables to avoid duplication and to remove discontinued series Tables 39 and 40 detail which tables are no longer published and provide alternative sources for where the content in those tables can be found Consumer price inflation time series Dataset MM23 | Released 16 April 2025 Comprehensive database of time series covering measures of inflation data for the UK including the CPIH Consumer price inflation detailed briefing note Dataset | Released 16 April 2025 The consumer price inflation detailed briefing note contains details of the items contributing to the changes in the CPIH a summary of the reconciliation of CPIH and RPI Consumer price inflation consumption segment indices and price quotes Dataset | Released 16 April 2025 Price quote data (for locally collected data only) and consumption segment indices that underpin consumer price inflation statistics are published giving users access to the detailed data that are used in the construction of the UK’s inflation figures Note that this dataset was previously called the consumer price inflation item indices and price quotes dataset Contributions to the 12-month rate of CPI(H) by import intensity Dataset | Released 16 April 2025 A time series of the contributions to the CPIH and CPI annual rates broken down by the import intensity of household purchases The most common approach to measuring inflation is the 12-month or annual inflation rate which compares prices for the latest month with the same month a year ago the annual rate is determined by the balance between upward and downward price movements across the range of goods and services included in the index The Consumer Prices Index including owner occupiers’ housing costs (CPIH) is the most comprehensive measure of inflation It extends the Consumer Prices Index (CPI) to include a measure of the costs associated with owning known as owner occupiers’ housing (OOH) costs Both are significant expenses for many households and are not included in the CPI The CPI is a measure of consumer price inflation produced to international standards, and is based on European regulations for the Harmonised Index of Consumer Prices (HICP) The CPI is the inflation measure used in the government’s target for inflation The CPI is produced at the same level of detail as the CPIH in our accompanying dataset and accompanying data time series OOH costs are the costs of housing services associated with owning The annual RPI inflation rate was 3.2% in March 2025 The UK Statistics Authority (The Authority) and HM Treasury launched a consultation in 2020 on The Authority’s proposal to address the shortcomings of the RPI. From 2030 (at the earliest), as outlined in The Authority’s response to the consultation the CPIH methods and data sources will be introduced into the RPI the supplementary and lower-level indices of the RPI will be discontinued As usual, we welcome your feedback on our work. To contact us, please email cpi@ons.gov.uk The “All items” Consumer Prices Index (CPI) and Consumer Prices Index including owner occupiers’ housing costs (CPIH) series incorporate price information from a wide range of goods and services the process for aggregating this detailed information has changed as a necessary step towards incorporating larger and more granular datasets into the consumer price indices Please note that the move from sample items to broader consumption segments means there is an impact on the individual price quotes and lower-level indices published from March 2025 in our Consumer price inflation consumption segment indices and price quotes dataset These outputs have been updated and presented in an improved format to help users transition to the use of consumption segments and other methodological changes We have published an updated glossary (XLSX, 25KB) which sets out the changes made from March 2025 To assist individuals in understanding how the rise in inflation affects their expenditure, we have produced a personal inflation calculator The calculator allows users to enter the amount they spend across either a reduced or a wide range of categories to produce an estimate of their personal inflation based on those spending patterns Please also note that table 55 in our Consumer price inflation tables dataset which provided a time series of prices for petrol and diesel has not been published from 26 March and the two series have been discontinued Historic average prices are still available from the time series explorer function on our website using the four-character identifiers CZMK for petrol and CZML for diesel On 27 February 2025, we published our quarterly Household Costs Indices (HCIs) for UK household groups bulletin The HCIs reflect how different types of households experience changing prices The CPIH and CPI are based on recognised economic principles and provide an aggregate measure of inflation for household spending in the UK The HCIs are official statistics in development and this release included new estimates for October to December 2024 It was not possible for this latest release to update the weights for 2024 in line with the standard methodology for consumer prices This is because of delays in processing the underlying survey data and the need for further ongoing quality assurance the most recent estimates have been compiled using the weights for February to December 2023 The Classification of Individual Consumption According to Purpose (COICOP) is the classification that underpins some of the main statistics produced by the ONS. The classification has seen a substantial update (PDF, 2.51MB) in recent years to reflect changes in household expenditure patterns since its inception in the late 1990s The UK currently uses the version of COICOP introduced in 1999 We will ensure that the new classification is implemented in a comprehensive and reliable manner that considers other ONS priorities around the transformation of our main statistics we will aim to introduce the new classification (COICOP 2018) as soon as possible as part of our wider plans to implement the updated System of National Accounts (SNA25) this is likely to be later than the date for implementation in some other countries We will share our implementation plan as soon as we can For further information, please email cpi@ons.gov.uk The weights for the Retail Prices Index (RPI) were also updated for 2025 in line with the practice followed both before and during the pandemic period This was with no additional adjustment to the spending data because of any coronavirus effects In line with the improvements introduced last year we now use unrounded weights in compiling CPIH and CPI The weights prior to 2024 for the CPI and CPIH were rounded to integers as parts per thousand of the all-items indices at the class level (4-digit COICOP) The RPI continues to be based on integer weights Previously, in December 2018, we published our Consumer Prices Index including owner occupiers’ housing costs (CPIH) historical series: 1988 to 2004 article This series is also not an accredited official statistic reflecting the historical uncertainty around the backcasts The consumer price indices are normally based on prices collected from outlets around the country supplemented by information collected centrally over the internet and by phone The figures in this publication use data collected on or around 18 March 2025 Our Consumer price indices, a brief guide: 2017 gives an overview of consumer price statistics, while our Consumer Prices Indices Technical Manual, 2019 covers the concepts and methodologies underpinning the indices in more detail Our CPIH Compendium provides a comprehensive source of information on the CPIH focusing on the approach to measuring owner occupiers’ housing costs Our Users and uses of consumer price inflation statistics: July 2018 update includes information on the users and uses of these statistics and the characteristics of the different measures of inflation related to potential use We illustrated our approach to Measuring changing prices and costs for consumers and households most recently in December 2023 using three “use cases” and described how they relate to the measures published and under development These accredited official statistics were independently reviewed by the Office for Statistics Regulation in July 2017. They comply with the standards of trustworthiness, quality and value in the Code of Practice for Statistics and should be labelled “accredited official statistics” Private rent and house prices, UK Bulletin | Released 16 April 2025 The Price Index of Private Rents (PIPR) measures private rent inflation for new and existing tenancies The UK House Price Index measures house price inflation Shopping prices comparison tool Interactive | Updated 16 April 2025 Search to see how the average prices of hundreds of shopping items are changing Consumer price inflation, updating weights: 2025 Article | Released 18 March 2025 An overview of the latest annual update of Consumer Prices Index including owner occupiers' housing costs (CPIH) weights Household Costs Indices for UK household groups Bulletin | Released 27 February 2025 Household Costs Indices expenditure shares and contributions for UK household groups and all-households These are official statistics in development Consumer price inflation, historical data, UK, 1950 to 1988 Dataset | Released 18 May 2022 Data tables of historical estimates modelled for the CPIH and Consumer Prices Index (CPI) over the period 1950 to 1988 UK Statistics Authority National Statistician’s Advisory Panels on Consumer Price Statistics Web page | Updated when needed Reports papers and minutes of the two independent advisory panels on consumer price statistics Includes a technical panel to advise the National Statistician on technical aspects of the statistics and a stakeholder panel to provide advice on the uses and applications of price indices Office for National Statistics (ONS), released 16 April 2025, ONS website, statistical bulletin, Consumer price inflation, UK: March 2025 BNTXBiontech SE BNTX reported a quarterly adjusted loss of €1.73​​ per share for the quarter ended March 31 The mean expectation of fourteen analysts for the quarter was for a loss of €2.09 per share Wall Street expected results to range from €-2.86 to €-1.45 per share Revenue fell 2.6% to €182.80 million from a year ago; analysts expected €177.40 million Biontech SE's reported EPS for the quarter was a loss of €1.73​ The company reported a quarterly loss of €415.8 million Biontech SE shares had risen by 15.2% this quarter and lost 7.9% so far this year The mean earnings estimate of analysts had fallen by about 17.7% in the last three months.​ one analyst negatively revised an earnings estimate The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 16 "strong buy" or "buy," 5 "hold" and no "sell" or "strong sell." The average consensus recommendation for the biotechnology & medical research peer group is also "buy" Wall Street's median 12-month price target for Biontech SE is $140.00 This summary was machine generated from LSEG data May 5 at 01:31 p.m. UTC. ​All figures in euros unless otherwise stated. (For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact RefinitivNewsSupport@thomsonreuters.com) PYIRYYParaguay's annual inflation rate fell to 4.0% in April 2025 from 4.4% the previous month, the first decline of the year. Prices rose at a softer pace for housing and utilities (3.8% vs. 3.6% in March) and food and non-alcoholic beverages (4.9% vs. 6.4%). In the meantime, inflation was unchanged for rent (1.8%). On a monthly basis, consumer prices in Paraguay rose 0.5% in April, after a 1.2% increase in March. March has seen a reduction in the number of objects re-entering Earth’s atmosphere when compared with the previous two months 1 was a piece of debris and 4 were unidentified objects likely to be either a rocket body or a satellite Collision risks to UK-licensed satellites remained steady in March with a 1% increase compared with February There was an increase to the in-orbit population during March with 285 newly catalogued objects added to the US Satellite Catalogue 131 newly catalogued objects were attributed to the Starlink constellation with a further 74 catalogued objects coming from the Falcon 9 Transporter 13 mission on 15 March There have been no new fragmentation (break-up) incidents this month Space weather was relatively quiet during March 2025 with a general absence of significant solar activity Periods of enhanced geomagnetic activity were observed throughout the month Possible impacts on satellites include increased drag on those in LEO which may have required corrective manoeuvres High frequency radio propagation may also have been degraded at higher latitudes One of the more notable events from last month was a strong high-frequency radio blackout affecting much of the sunlit side of the Earth for about an hour Low frequency navigation systems may have been degraded for a similar amount of time with satellites likely to have experienced a modest increase in Single Event Upsets (SEUs) The National Space Operations Centre combines and coordinates UK civil and military space domain awareness capabilities to enable operations promote prosperity and protect UK interests in space and on Earth from space-related threats JBTMJBT Marel Corp JBTM reported quarterly adjusted earnings of 97 cents​​ per share for the quarter ended March 31 The mean expectation of seven analysts for the quarter was for earnings of 83 cents per share Wall Street expected results to range from 80 cents to 92 cents per share Revenue rose 117.7% to $854.10 million from a year ago; analysts expected $836.19 million JBT Marel Corp's reported EPS for the quarter was a loss of $3.35​ The company reported a quarterly loss of $173 million JBT Marel Corp shares had fallen by 12.3% this quarter and lost 15.7% so far this year The mean earnings estimate of analysts had fallen by about 12.9% in the last three months.​ there have been no negative revisions of earnings estimates The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy," 2 "hold" and 1 "sell" or "strong sell." The average consensus recommendation for the industrial machinery & equipment peer group is also "buy" Wall Street's median 12-month price target for JBT Marel Corp is $141.50 This summary was machine generated from LSEG data May 5 at 01:31 p.m. UTC. ​All figures in US dollars unless otherwise stated. (For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact RefinitivNewsSupport@thomsonreuters.com) * Seasonally adjusted figure (note that monthly % changes are revised when seasonal adjustment factors are re-estimated) “UK house price growth remained stable in March at 3.9% There was no change in prices month-on-month given the end of the stamp duty holiday at the end of March (transactions associated with mortgage approvals made in March would be unlikely to complete before the deadline).  the market is likely to remain a little soft in the coming months since activity will have been brought forward to avoid the additional tax obligations – a pattern typically observed in the wake of the end of stamp duty holidays activity is likely to pick up steadily as the summer progresses despite wider economic uncertainties in the global economy since underlying conditions for potential home buyers in the UK remain supportive earnings are rising at a healthy pace in real terms (i.e household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we and most other analysts expect “Our regional house price indices are produced quarterly with data for Q1 (the three months to March) indicating that annual house price growth in most regions remained broadly similar to last quarter with annual price growth accelerating to 13.5% more than double the pace of the next fastest outturn in Q1 and the highest recorded in the region since 2021 though similar to the robust rates of growth seen in border regions of Ireland in recent quarters similar to the 3.1% annual rise seen last quarter The north-south divide in house price performance persisted with prices in Northern England (comprising North East Midlands and West Midlands) up 4.9% year on year the North West was the best performing English region London and East Anglia) saw a more modest 2.5% year-on-year rise The Outer South East was the best performing southern region with annual price growth of 3.0% London was the weakest performing region in the UK as a whole “Our most recent data by property type reveals that semi-detached houses have seen the biggest percentage rise in prices over the last 12 months “By contrast flats saw a slowing in annual price growth compared with last quarter Detached properties recorded a 4.5% annual increase while terraced properties saw a 4.1% year-on-year rise.” Please note that these figures are for the three months to March therefore will show a different UK average price and annual percentage change to our monthly house price statistics The Nationwide House Price Indices are prepared from information that we believe is collated with care but no representation is made as to their accuracy or completeness We reserve the right to vary our methodology and to edit or discontinue the indices at any time Persons seeking to place reliance on the Indices for any purpose whatsoever do so at their own risk and should be aware that various factors including external factors beyond Nationwide Building Society’s control might necessitate material changes to the Indices The Nationwide House Price Indices may not be used for commercial purposes including as a reference for: Nationwide Building Society is the owner of the trade mark “Nationwide” and all copyright and other rights in the Nationwide House Price Indices The application of the IOSCO Principles on financial benchmarks to the NHPI is more fully set out in our statement regarding IOSCO Principles. Nationwide considers that its arrangements for administration of the NHPI comply with the IOSCO Principles in a proportionate manner having regard to the nature of the index. Commentary and other materials posted on our website are not intended to amount to advice on which reliance should be placed or an offer to sell or solicit the purchase by you of any products or services that we provide. We therefore do not accept any liability or responsibility arising from any reliance placed on such materials by any visitor to our website, or by anyone who may be informed of any of its contents. VasakronanA quarter in line with expectations "Our key metrics for the quarter were robust and in line with expectations. The office market is still challenging, but stable trends were posted for operating surplus and income from property management when items affecting comparability are excluded," says Johanna Skogestig, CEO of Vasakronan. "Access to financing is good and we continue to borrow on favourable terms. It is natural during uncertain times for investors to become more cautious and selective in their investments. This benefits a stable company like Vasakronan and bond investors continue to demonstrate strong interest in us." "In the quarter our Grev Tureplan property was rewarded two awards, the Building of the Year 2025 award and the 2025 Health & Safety award from Håll Nollan. To carry through a project like this in central Stockholm is challenging, and I therefore feel immense pride that the work the team has done is being recognized." https://news.cision.com/vasakronan/r/vasakronan-s-interim-report-january-march-2025%2Cc4145095 https://news.cision.com/vasakronan/i/grev-tureplan-%2Cc3405329 FRPTFreshpet Inc FRPT reported quarterly adjusted earnings of 9 cents​​ per share for the quarter ended March 31 The mean expectation of fifteen analysts for the quarter was for earnings of 9 cents per share Wall Street expected results to range from -3 cents to 18 cents per share Revenue rose 17.6% to $263.25 million from a year ago; analysts expected $260.12 million Freshpet Inc's reported EPS for the quarter was a loss of 26 cents​ The company reported a quarterly loss of $12.7 million Freshpet Inc shares had fallen by 8.2% this quarter and lost 48.4% so far this year The mean earnings estimate of analysts had fallen by about 61.6% in the last three months.​ four analysts negatively revised earnings estimates The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 13 "strong buy" or "buy," 5 "hold" and no "sell" or "strong sell." The average consensus recommendation for the food processing peer group is also "buy" Wall Street's median 12-month price target for Freshpet Inc is $122.50 "It is the duty of the Office to examine and report on the sustainability of the public finances" The latest update of our forecasts was published on 26 March 2025 in the March 2025 Economic and fiscal outlook. Read the Executive summary for the key messages of our forecast or the full report on our website Chapter 2 sets out our forecasts for the economy over a five-year horizon We cover our latest forecast changes in light of recent developments and the effect of policies in the Spring Statement details the policy measures announced since October 2024 provides an update on selected previous measures and discusses policy risks and uncertainties Chapters 4-6 sets out our forecasts for receipts and public spending over a five-year horizon We also explain our loans and other financial transactions forecasts we assess the Government against its fiscal targets and assesses their likelihood of being met on current policy under our central forecast We consider the uncertainty around our economic and fiscal forecasts and the risks to the Government meeting its targets We also test the sensitivity of our fiscal forecasts in an alternative economic scenario Annex A contains detailed summary tables setting out our economic and fiscal forecasts This Economic and fiscal outlook (EFO) sets out our central forecast and the uncertainties that surround it for the five years to 2029-30 taking account of recent data and government policies announced since our last forecast up to and including the March 2025 Spring Statement The forecasts presented in this document represent our collective view as the three independent members of the OBR’s Budget Responsibility Committee (BRC) We take full responsibility for the judgements that underpin them and for the conclusions we have reached we have been greatly supported in our work by the staff of the OBR We are very grateful for their hard work and expertise We have also drawn on the work and expertise of officials across government in preparing these forecasts We are grateful for their engagement and insight The date for this forecast was announced on 16 December giving four weeks more than the ten weeks’ notice required by the Memorandum of understanding between the Office for Budget Responsibility the Department for Work and Pensions and HM Revenue and Customs (MoU) We published the timetable of the key stages of the forecast on 22 January once it had been agreed by signatories of the MoU Overall the forecast process for this EFO proceeded smoothly The exception was the process around welfare and employment support policies which are a subset of the wider package of reforms and policy ambitions announced in the Pathways to Work Green Paper published on 18 March Details of the policy package were sent to us very late in the process and late notice of changes and incomplete analysis hampered our ability to reflect these measures in our forecasts: we plan to work with the Treasury and DWP to further scrutinise both the direct and indirect effects of these welfare and employment support policies ahead of our next forecast alongside the effects of any further measures from the Green Paper that have been sufficiently developed The recommendations of our review into the preparation of the March 2024 forecast for departmental expenditure limits (DEL) which were published alongside our previous EFO in October have continued to be implemented in the production of this forecast The timetable for the production of this forecast was as follows: the BRC held dozens of scrutiny and challenge meetings with officials from other departments in addition to numerous further meetings at staff level and with external stakeholders We have been provided with all the information and analysis that we requested and have come under no pressure from Ministers or officials to change any of our conclusions The BRC met with the Chancellor on two occasions to discuss the forecast over the course of its production (on 5 February and 19 February) and one of the Chancellor’s special advisers attended three of the analytical focus groups that we held with Treasury officials A full log of our substantive contact with Ministers their offices and special advisers can be found on our website This includes the list of special advisers and officials who received the near-final draft of the EFO on 21 March We would be pleased to receive feedback on any aspect of the content or presentation of our analysis. This can be sent to [email protected] 1.1 The economic and fiscal outlook has become more challenging since the Autumn Budget Domestic output stagnated in the second half of 2024 and business and consumer confidence have trended lower recently and government bond yields are up by around ½ a percentage point The outlook has also become more uncertain with two geopolitical risks highlighted in our 2022 Fiscal risks and sustainability report beginning to crystallise: upward pressure on defence spending and a tightening of global trade restrictions and output data do not provide a clear signal about domestic economic prospects 1.2 Against this more challenging and uncertain backdrop we now expect real GDP growth of 1.0 per cent this year before it recovers to average around 1¾ per cent over the rest of the decade While the Government’s planning reforms deliver a modest boost to the level of potential output of 0.2 per cent in 2029 its cumulative growth between 2023 and 2029 is still ½ a percentage point lower than we projected in October and the level of productivity is over 1 per cent lower Higher energy and food prices and more persistently high wage growth cause inflation to rebound to a quarterly peak of 3.7 per cent in mid-2025 before returning to target over the rest of the forecast 1.3 The underlying fiscal outlook has also deteriorated since October Higher debt interest payments and weaker-than-expected receipts take the current balance from a surplus of £9.9 billion to a deficit of £4.1 billion in 2029-30 notably the direct savings from welfare reforms and the reduction in day-to-day departmental spending and the indirect boost to receipts from planning reforms This means that the fiscal rules for a current balance and for net financial liabilities to be falling in 2029-30 are both met by similar small margins to October of £9.9 billion and £15.1 billion respectively But borrowing is projected to be £3.5 billion higher and debt 0.6 per cent of GDP higher at the end of the decade than in our October forecast 1.4 Significant uncertainty surrounds domestic and global economic developments If the projected recovery in UK productivity growth fails to materialise and it continues to track its recent trend then output would be 3.2 per cent lower and the current budget would be 1.4 per cent of GDP in deficit by the end of the decade A 0.6 percentage point increase in Bank Rate and gilt yield expectations across the forecast would eliminate current balance headroom And if global trade disputes escalate to include 20 percentage point rises in tariffs between the USA and the rest of the world this could reduce UK GDP by a peak of 1 per cent and reduce the current surplus in the target year to almost zero developments in outturn data and indicators of business The ONS has revised up the historical size of the UK workforce by 1.5 per cent (½ a million) in 2024 It also revised up the level of real GDP by 0.8 per cent in mid-2024 But real GDP growth largely stagnated over the second half of 2024 rather than continuing to grow meaning the level of output was broadly in line with our previous expectations by the end of 2024 The net effect of these developments was that the measured level of productivity (output per hour worked) at the end of 2024 was 1.3 per cent lower than in the October forecast indicators of both business and consumer confidence have also trended lower And European gas prices have risen while government bond yields have increased across many advanced economies real GDP is now projected to grow by 1.0 per cent in 2025 Around one-third of the lower growth this year reflects what appears to be structural weakness and its trend level is 1.3 per cent lower at the forecast horizon than expected in October The remaining two-thirds is due to what appear to be cyclical factors including higher interest rate expectations GDP growth is expected to accelerate to 1.9 per cent in 2026 as monetary policy eases Growth then averages 1¾ per cent over the rest of the decade Government policies temporarily boost demand by 0.1 per cent in the middle of the forecast and permanently raise supply by 0.2 per cent at the forecast horizon the permanent hit to productivity is partly offset by stronger workforce growth leaving cumulative growth in potential output between 2023 and 2029 ½ a percentage point lower than forecast in October There remains considerable uncertainty about how to interpret recent developments in UK labour force We therefore explore the economic and fiscal implications of alternative scenarios for both domestic productivity growth and global tariff policies 1.7 Interest rate expectations have risen since our October forecast Bank Rate is expected to fall from its current level of 4.5 per cent to 3.8 per cent from mid-2026 onwards around a ¼ percentage point higher than in the October forecast UK 10-year gilt yields have also risen by around ½ a percentage point since early October with similar moves in many other advanced economies Interest rate expectations have remained highly volatile over this period with 10-year gilt yields varying by a full percentage point between 3.9 and 4.9 per cent 1.8 Annual CPI inflation is forecast to rise from 2.5 per cent in 2024 to 3.2 per cent in 2025 0.6 percentage points higher than forecast in October Wholesale gas prices are expected to peak at around 130 pence a therm in 2025 which is around 30 per cent higher than forecast in October Oil prices are forecast to average 74 dollars a barrel in 2025 The resulting increases in the Ofgem price cap coupled with higher food prices and the increase in regulated water bills are expected to push monthly inflation up to a peak of 3.8 per cent in July 2025 CPI inflation falls rapidly back to around the 2.0 per cent target as energy prices drop and wage growth eases back from currently elevated rates 1.9 We expect the unemployment rate to peak at 4.5 per cent (1.6 million people) in 2025 as spare capacity opens up before falling to its estimated structural rate of 4.1 per cent in 2028 This is 0.4 percentage points (160,000 people) higher in 2025 than assumed in our October forecast due to a larger negative output gap (greater excess supply) in the near term Having fallen by over a percentage point since 2019 the employment rate is forecast to decline slightly further from 60.5 per cent in the second half of 2024 to 60.2 per cent in 2029 This is because population ageing outweighs the effects of the forthcoming rise in the state pension age and a reduction in inactivity due to caring (from a falling birth rate and expanded childcare provision) But this level is 0.3 percentage points higher than forecast in October due to ONS revisions and recent data suggesting the current trend participation rate is higher than we previously thought While our fiscal forecast takes account of the direct fiscal costs of some of the welfare policies in the Government’s Pathways to Work Green Paper and their indirect effects on aggregate demand we have not incorporated most of their supply-side impacts on the labour market This was due to insufficient information from the Government on the policies announced and analysis of their likely economic effects We will incorporate our estimate of these impacts in our next forecast net additions to the UK housing stock are forecast to reach 305,000 a year by the end of the decade we project around 1.3 million cumulative net additions to the housing stock we estimate an additional 170,000 are due to the Government’s reforms to the National Planning Policy Framework increasing the total housing stock by around 0.5 per cent in 2029-30 we expect these reforms could add 0.2 per cent to the level of potential output thanks to a boost in the productivity of residential construction and the increased flow of housing services from the higher stock of houses Over a longer horizon we would expect these effects to build to 0.4 per cent by 2034-35 and we would anticipate a further additional benefit from greater labour mobility and agglomeration effects adding just under 0.1 per cent to potential GDP by 2034-35 1.11 After falls of 0.9 per cent in 2023 and 0.1 per cent in 2024 real GDP per person is expected to recover slightly with growth of 0.3 per cent in 2025 before averaging 1.4 per cent over the rest of the forecast Nominal earnings growth is forecast to ease from 4.7 per cent in 2024 to 4.3 per cent in 2025 0.7 percentage points stronger than our October forecast Nominal earnings growth then averages just over 2 per cent a year from 2026 as the labour market loosens and firms rebuild margins and have more scope to pass on higher costs from the rise in employer National Insurance contributions (NICs) to employees Real earnings grow by 1.4 per cent in 2025 before growth recovers a little to reach 0.5 per cent in 2029 Real household disposable income (RHDI) per person is expected to grow by an average of around ½ a per cent a year from 2025-26 to 2029-30 stronger wage growth means RHDI per person growth is slightly higher on average 1.12 Average growth in nominal GDP from 2025-26 onwards is broadly unchanged relative to October But we expect stronger growth in labour incomes thanks to wage settlement expectations continuing to hold up relative to weak productivity growth and falling inflation Growth in nominal consumption and corporate profits is weaker over the forecast than in October borrowing is projected to be £13.1 billion higher in 2029-30 than in the October forecast The most significant drivers of this are higher forecast Bank Rate which together raise debt interest costs by amounts rising to £10.1 billion in 2029-30 relative to October Other spending areas are also higher in the near term mainly reflecting higher capital spending by local authorities and public corporations but these increases taper off in the medium term Receipts in 2024-25 are expected to be £7.6 billion below the October forecast mainly due to weaker-than-expected self-assessment and onshore corporation tax payments But higher forecast growth in nominal earnings boosts income tax and NICs over the remainder of the forecast total pre-measures receipts are down only £0.6 billion in 2029-30 compared with October forecast changes to debt interest and tax drive a slightly larger deterioration in the current balance (revenues minus day-to-day spending) than in borrowing from a surplus of £9.9 billion in October to a deficit of £4.1 billion 1.14 Against this weaker pre-measures fiscal outlook the Government has announced a set of policies which reduce borrowing by £9.7 billion and improve the current balance by £14.0 billion in 2029-30 1.15 Taking account of both forecast and policy changes public sector net borrowing (PSNB) is forecast to fall from £137.3 billion (4.8 per cent of GDP) this year to £74.0 billion (2.1 per cent of GDP) in 2029-30 it is higher by £12.1 billion (0.4 per cent of GDP) in 2025-26 falling to £3.5 billion (0.1 per cent of GDP) in 2029-30 A rising tax take contributes three-quarters to the fall in borrowing as a share of GDP over the next five years with a reduction in spending as a share of GDP contributing the remaining quarter 1.16 Tax as a share of GDP is forecast to rise from 35.3 per cent this year to a historic high of 37.7 per cent in 2027-28 and remain at a high level for the rest of the forecast The sharp forecast increase in 2025-26 is largely due to the Autumn 2024 Budget increase in employer NICs and an expected recovery in capital tax receipts The further forecast rise in the tax take to 2027-28 is mainly due to growth in nominal earnings combined with frozen tax thresholds and a boost to receipts from the Temporary Repatriation Facility (TRF) announced at the Autumn Budget as part of the reforms to the non-domicile regime The tax take is then forecast to level off as personal thresholds are unfrozen and the take-up of electric vehicles reduces fuel duty receipts 1.17 Public spending is forecast to rise to 45.0 per cent of GDP next year before declining over the remainder of the decade to 43.9 per cent of GDP in 2029-30 1.18 Public sector net debt (PSND) is largely flat over the forecast at 95.9 per cent of GDP this year and 96.1 per cent of GDP in 2029-30 PSND is 0.8 percentage points lower this year due to ONS revisions but 0.6 percentage points higher on average from 2026-27 onward mainly due to higher forecast borrowing Net debt excluding the Bank of England rises in every year of the forecast as a share of GDP It converges with PSND toward the end of the decade as the Term Funding Scheme and asset purchase facility unwind 1.19 The Government’s fiscal mandate for the current budget to be in balance in 2029-30 is met with headroom of £9.9 billion (0.3 per cent of GDP) in the central forecast Underlying forecast changes reduced headroom against the current budget by £14.0 billion so the fiscal mandate would have been missed by £4.1 billion in the pre-measures forecast Government policies improved the current budget by £14.0 billion so that the mandate is met with identical headroom to October there is significant risk around the central forecast for the current budget the probability of meeting the fiscal mandate is 54 per cent 1.20 The supplementary target for public sector net financial liabilities (PSNFL) to be falling in the final year of the forecast is also met in the central forecast with headroom of £15.1 billion (0.4 per cent of GDP) PSNFL rises from 81.9 per cent of GDP this year to a peak of 83.5 per cent in 2026-27 and falls thereafter to 82.7 per cent in 2029-30 Forecast changes reduced headroom by £10.8 billion with measures restoring nearly all of it such that the target is met by a £0.6 billion smaller margin relative to October the probability of meeting the supplementary target is 51 per cent 1.21 Headroom of £9.9 billion against the fiscal mandate is only one-third of the average of £31.3 billion that Chancellors have set aside against their fiscal rules since 2010 It is also a very small margin compared to the risks and uncertainty inherent in any fiscal forecast The average absolute final-year revision to pre-measures borrowing over the past ten forecasts has been £19.4 billion And risks to the forecast are heightened at present given the significant uncertainty surrounding domestic and global economic developments 1.22 Key risks to our economy forecast include: 1.23 Significant risks to the fiscal forecast over the medium term include: 1.24 The long-term fiscal outlook remains very challenging and rising geopolitical tensions putting the public finances on an increasingly unsustainable path The baseline projection in our 2024 Fiscal risks and sustainability report would require fiscal tightening of 1.5 per cent of GDP per decade over the next 50 years to return debt to pre-pandemic levels Leaving policy settings unchanged in the long term would see debt rise to over 270 per cent of GDP by the mid-2070s 2.1 This chapter describes our latest economy forecast 2.2 Since finalising our October 2024 forecast several key data releases have changed our view of the recent performance of the UK economy This includes the Quarterly National Accounts released on 30 September consistent with Blue Book 2024 which contained revisions to GDP outturns between 2020 and the second quarter of 2024 (but was released too late to be included in our October forecast) Other releases include subsequent ONS population and GDP estimates covering the remainder of 2024 2.3 In addition to these developments in UK economic outturn data the global economic outlook has also become more challenging and more volatile than in October Market expectations for the future path of interest rates and energy prices have both increased Bank Rate and 10-year gilt yields are 0.2 and 0.4 percentage points higher on average across the forecast period Gas prices in 2025 are forecast to be around 30 per cent higher than in our October forecast And following the election of a new US administration in November US trade policies and those of its major trading partners remain in flux 2.4 The higher starting point for the size of the workforce and higher market expectations for energy prices and interest rates explain a large part of the changes in this forecast relative to October But significant uncertainty continues to surround recent economic developments in the UK This is partly due to issues with data measurement and volatility demonstrated by the latest quarterly data showing a partial reversal of the earlier decline in productivity And the global economic policy environment has been changing from day to day in the run-up to this forecast Alongside the central forecast we therefore explore the economic and fiscal implications of alternative scenarios for UK productivity (Box 2.1 and Chapter 7) and global trade policy (Box 2.2 and Chapter 7) Bank Rate (taken over the 10 working days to 12 February) is expected to fall from its current level of 4.5 per cent to 3.8 per cent from mid-2026 onwards (Chart 2.1) The Bank of England cut Bank Rate by 0.25 percentage points in February and market participants expect further cuts totalling 0.6 percentage points this year the expected path of Bank Rate is both slightly higher and flatter than in October It is 0.2 and 0.3 percentage points above the October forecast Market participants’ expectations for Bank Rate have remained volatile since finalising our October pre-measures forecast Expectations for 2029 have ranged by a full percentage point 2.6 Market pricing for 10-year gilt yields rise from 4.3 per cent at the end of 2024 to 5.2 per cent in 2029 (Chart 2.2 this is 0.4 percentage points higher our October forecast UK 10-year spot gilt yields have increased by around ½ percentage point This increase was broadly in line with the increase in bond yields across many other advanced economies (Chart 2.2 10-year gilt yields have also remained volatile varying by a full percentage point between 3.9 and 4.9 per cent over the same period We explore the sensitivity of the fiscal outlook to alternative paths for interest rates in Chapter 7 as measured by the FTSE All-shares index,increased by 6 per cent in 2024 and are 0.7 per cent higher than our October forecast on average across the forecast period Equity prices are assumed to grow in line with nominal GDP They are an important driver of both the capital taxes forecast and the value of equity assets within public sector net financial liabilities (PSNFL) 2.8 Market-based expectations for gas and electricity prices have risen significantly since the October forecast Wholesale gas prices are expected to peak at an average of just under 130 pence a therm in 2025 Prices remain elevated in 2026 before falling to just under 90 pence a therm from mid-2027 onwards though the average is still 15 per cent higher than our October forecast Electricity prices are also higher than in October up more than 20 per cent on average over 2025 and 2026 and over 5 per cent in the medium term then gradually fall back to 71 dollars in 2029 The outlook for commodity prices is also uncertain Gas price expectations for 2025 have ranged from a low of just under 90 to a high of around 135 pence a therm since the October forecast 2.9 Our forecast for the world economy is based on the IMF’s 17 January World Economic Outlook Update (WEO) This did not incorporate recent developments in US and global trade policy but did include the impact of a temporary increase in trade policy uncertainty in the run-up to January We now expect global GDP growth of 3.3 per cent in 2025 and 2026 unchanged this year and up 0.1 percentage points next year relative to our October forecast The slightly stronger global growth outlook is driven by stronger growth in the US which is only partly offset by weaker growth in Europe and other advanced economies 2.10 Even before taking account of tariffs announced since the start of the year the January WEO expected global trade growth to slow from 3.4 per cent in 2024 to 3.3 per cent on average between 2025 and 2027 This is 0.1 percentage points lower than our October forecast as trade policy uncertainty temporarily weighs on growth Cumulative growth in UK export markets between 2024 and 2029 is around 2 percentage points lower than anticipated in October in line with weaker eurozone and US import growth Given the considerable uncertainty over the global trade outlook in Box 2.2 we explore alternative scenarios for the impact of different US and global trade policies on the UK economy 2.11 The trade-weighted sterling effective exchange rate is 1 per cent lower across the forecast period than in our October projection.[3] Compared to our October outlook the pound is around 5 per cent weaker against the dollar and ¾ per cent stronger against the euro over the forecast helping to ensure that borrowing costs and inflation are lower than they otherwise might be 2.13 The path of overall borrowing is similar to that in our October forecast This reflects a pre-measures deterioration due to a 0.1 per cent of GDP lower primary balance in 2029-30 and 0.2 per cent of GDP higher net interest payments This is offset by the effect of government decisions including tighter fiscal policy and the indirect effects of planning reform which raise the primary balance by 0.2 per cent of GDP by our forecast horizon We discuss the magnitude and composition of this fiscal tightening in Chapter 3 with the ‘indirect effects’ of government decisions on our economy forecast discussed in Box 3.1 in Chapter 3 potential output growth falls from 1.5 per cent in 2024 to 1.2 per cent in 2025 and then picks up gradually to 1.8 per cent in 2029 (Chart 2.4) Most of the potential output growth in 2024 and 2025 comes from growth in the adult population levels drags down growth in aggregate potential output in 2025 The rise in growth in later years is due mainly to a projected recovery in total factor productivity (TFP) growth which more than offsets a further drop in the growth of the labour supply We describe each component of potential output from paragraph 2.19 and the implications for output per person are discussed in paragraph 2.35 the level of potential output in 2029 (the final year of our forecast) is 0.3 per cent higher (Chart 2.5) This is the net result of a significant upward revision to trend total hours worked (1.5 per cent) and downward revision to the level of trend productivity (1.3 per cent) It is also the net result of upward revisions to historical data and downward revisions to a combination of recent data and our forecast 2.16 The level of potential output in 2023 was 0.7 per cent higher than we assumed in the October forecast This is based on upward revisions to historical data for real GDP and our judgement that spare capacity over this period is unchanged This upward revision to the starting level of potential output was driven by a much higher level of labour supply (adding 1.2 percentage points) partially offset by a lower starting level of trend productivity (deducting 0.5 percentage points) 2.17 Pre-measures potential output growth between 2023 and 2029 has been revised down by a cumulative 0.5 percentage points over the six years or an annual average of 0.1 percentage points: 2.18 Policy measures incorporated in this forecast are estimated to raise potential output by 0.2 per cent in 2029 mainly driven by the effect of residential planning reforms (see Chapter 3 for more details) 2.19 Labour supply (measured by trend total hours worked) is projected to be 1.5 per cent higher than in October at the end of the forecast period.[5] This entirely reflects a higher starting point due to a larger population Annual labour supply growth over the forecast period is unchanged from October It falls from 1.2 per cent in 2024 to 0.5 per cent in 2029 as net migration falls while participation and average hours worked slightly decrease due to an ageing population Aside from a small negative impact on labour supply from reversing reforms to the work capability assessment (WCA) announced in 2023 we have not incorporated supply-side effects of policies in the Government’s Pathways to Work Green Paper in this forecast due to insufficient information (see Box 3.2 in Chapter 3 for more details) net migration falls sharply from 728,000 in the year to mid-2024 to a trough of 258,000 in the year to mid-2027 before reaching 340,000 at the forecast horizon (Chart 2.6 This sharp fall in net migration over the forecast is consistent with the tightening of visa policies mainly regarding dependants of students and care workers and higher levels of emigration following recent high levels of immigration (especially among students) The effect of tighter visa policies is already evident in the latest visa data which show a sharp reduction across most visa types up to December 2024 (Chart 2.6 The medium-term level of net migration is slightly higher than in our October forecast (by 25,000) This is in line with evidence suggesting a higher share of immigrants are staying in the UK under the new migration system 2.22 Based on these latest ONS population projections we now assume the adult population grows by 2.1 million people over the next five years to reach 57.8 million in 2029 Annual adult population growth averages 0.8 per cent over the forecast period the adult population is ½ million higher than in the October forecast almost entirely reflecting the higher starting level Despite the LFS now using a more up-to-date population base it is still not capturing the latest upward revisions to migration data This means that there are likely to be some further upward revisions to the adult population in the next LFS reweighting 2.23 The trend labour force participation rate is forecast to fall slightly from 63.0 per cent in 2024 to 62.8 per cent in 2029. Across the forecast period, this is 0.3 percentage points higher on average than the October forecast, largely reflecting a higher starting point and a broadly unchanged forecast profile.[8] This forecast incorporates a set of age-specific participation rates using the new ONS population projections The decline in the participation rate over the next five years is driven primarily by the steady ageing of the population as the share of over-60s rises from 25 per cent in 2022 to 27 per cent in 2029 There is also a contribution from inactivity due to long-term sickness consistent with the forecast for a further rise in incapacity benefits caseloads (see Chapter 5 for more details) 2.24 This decline is partly offset by three other factors the increase in the state pension age from 66 to 67 in 2028 which boosts participation among this group (see Box 6.1) a further decline in inactivity due to caring for young children as a consequence of falling birth rates and policy measures to increase childcare provision as this group are more likely to be of working age than the domestic population which more than compensates for their slightly lower participation rate for a given age 2.25 Trend average hours worked fall slightly over the forecast from 32.0 hours in 2025 to 31.8 hours in 2029 This reflects the drag from the ageing population as older people work shorter hours on average The LFS measure of average hours worked has been very volatile over the past year which may be related to ongoing issues with the survey making it difficult to identify trends in hourly productivity While there is a lot of uncertainty around the estimates we judge that the starting position of trend average hours is marginally higher than our October forecast The cumulative fall in average hours worked over the forecast (and negative contribution to potential output growth) is similar to the October forecast 2.26 Both the level and growth rate of measured productivity have been lower than we expected in October between 2021 and the second quarter of 2024 the ONS revised up the total population and total hours worked by more than they revised up GDP mechanically lowering the level of productivity while total hours worked were higher than forecast in October measured output per hour fell by 0.4 per cent in 2023 and by 1.0 per cent in 2024 ending the year 1.3 per cent lower in level terms than in our October forecast 2.27 We judge the weaker-than-expected productivity growth in 2023 and 2024 partly reflects cyclical factors Survey indicators and inflation data suggest some spare capacity has opened up within firms though not enough to fully explain the weakness in measured output per hour We therefore estimate that trend (or underlying) productivity continued to grow in 2023 and 2024 but weakly and at a slower pace than assumed in the October forecast as much of the downward revision to measured productivity growth was due to the ONS more accurately reflecting recent population growth we think some of the recent weakness is structural the estimated level of trend productivity is lower than in our October forecast by 0.5 per cent in 2023 and by 0.9 per cent in 2024 we expect that the level of trend productivity will remain permanently below our October forecast but growth will return to a similar medium-term rate (Chart 2.7) Trend productivity growth in 2025 is expected to be 0.3 per cent largely reflecting base effects from the weakness in the second half of 2024 Trend productivity growth from 2026 onwards is little changed from the October forecast broadly the average of the higher growth in the decade before and lower growth in the decade after the global financial crisis The level of trend productivity is therefore 1.3 per cent below our previous forecast in 2029 2.29 We expect that the impact of policies incorporated in this forecast will increase the level of trend productivity by 0.2 per cent in 2029 This increase is driven by the residential planning reforms which we expect to increase construction sector productivity and housing services due to the higher housing stock The outlook for trend productivity is one of the most important and uncertain forecast judgements Successive past forecasts for trend productivity have proven to be too optimistic as productivity growth has continued to disappoint we have lowered our medium-term productivity growth assumption from around 2.2 per cent to 1¼ per cent Given the measurement and volatility issues with recent outturn data alongside the wider economic risks that could impact future productivity (such as those surrounding global trade) the uncertainty around our productivity assumption remains high the following scenarios show how different judgements about the outlook for trend productivity would affect the economic and fiscal forecast (Chart A): We discuss the fiscal implications of these scenarios in Chapter 7 2.30 The latest indicators suggest that there is currently a small amount of spare capacity (excess supply) in the economy and slightly more than we forecast in October Our estimate of the output gap (real GDP relative to our estimate of potential output) in the fourth quarter of 2024 is -0.5 per cent This is 0.2 percentage points lower (more spare capacity) than in October The negative output gap reflects subdued economic growth in recent quarters capacity utilisation indicators falling slightly below their normal levels Given we cannot directly observe the output gap there is always significant uncertainty around these estimates 2.31 We expect that the output gap will trough in 2025 at -0.6 per cent before narrowing and closing by early 2027 as output returns to our estimate of potential (Chart 2.8) Over 2025 and 2026 we now expect excess supply with the output gap 0.6 percentage points lower on average over this period higher market expectations for interest rates Government policy measures announced since October are expected to lift the output gap by around 0.1 percentage points through the middle of the forecast period primarily reflecting the impact of planning reforms (see Chapter 3) 2.32 Real GDP grew by 0.9 per cent in 2024 0.2 percentage points lower than anticipated in October We now expect similar growth of 1.0 per cent in 2025 half the 2.0 per cent growth assumed in our October forecast (Chart 2.9 Around one-third of this difference in 2025 reflects the lower growth in potential output due to structural weakness in productivity The remaining two-thirds reflects cyclical weakness due to higher interest rate and energy price expectations The latter is shown by measures of consumer and business confidence having generally trended lower in recent months The S&P Global/CIPS UK composite PMI also points to only a modest expansion in activity in the first couple of months of 2025 as it remains below the historical average 2.33 Our central forecast has GDP growth accelerating to 1.9 per cent in 2026 then averaging 1.8 per cent a year over the rest of the forecast broadly in line with our potential output forecast The projected acceleration in 2026 reflects monetary policy loosening and a gradual easing of uncertainty resulting in spare capacity in the economy being used up While the forecast for GDP growth is much weaker in the near term our forecast for medium-term GDP growth is slightly higher than in October This is due to the more negative starting output gap providing more scope for above-trend GDP growth and the impact of planning reforms cumulative real GDP growth is around ½ percentage point lower than the October forecast 2.34 The risks around our forecast for real GDP growth are substantial with considerable uncertainty regarding both the domestic and international outlook productivity growth is one of the most important and uncertain forecast judgements and Chapter 7 sets out the fiscal implications of the alternative productivity scenarios described in Box 2.1 market expectations for interest rates have been volatile across advanced economies underscoring the continued uncertainty around the monetary and fiscal policy outlook Developments in global trade policies represent another significant forecast risk We explore the effect of potential changes in global trade policy on real GDP in Box 2.2 Purely based on historical forecast errors there is roughly a three-in-ten chance that real GDP will fall in 2025 and roughly a similar chance that growth will exceed 2 per cent this year (Chart 2.9 2.36 CPI inflation is forecast to rise from 2.5 per cent in 2024 to 3.2 per cent in 2025 but then fall rapidly to around the 2.0 per cent target from mid-2026 onwards Monthly CPI inflation is expected to peak at around 3.8 per cent in July 2025 This is driven by increases in the Ofgem price cap due to higher energy prices higher food prices due to an increase in domestic costs and the increase in regulated water bills from April 2025 CPI inflation is forecast to fall rapidly as increases in household energy bills fall out of the annual comparison and more spare capacity in the economy opens up CPI inflation is forecast to be 0.6 percentage points higher in 2025 This would leave the CPI price level 0.2 per cent higher at the end of the forecast period in 2029 there is roughly a one-in-five chance of CPI inflation being below 2.6 per cent or above 4.0 per cent in 2025 2.38 RPI inflation is forecast to average 4.1 per cent in 2025 before falling rapidly to 3.2 per cent in 2026 and to 2.9 per cent on average thereafter Our forecast for RPI inflation in 2025 has been revised up 0.6 percentage points relative to the October forecast in 2026 and 2027 we forecast a slightly larger gap between RPI and CPI inflation than in October because of stronger growth in house prices and mortgage interest payments which affect RPI but not CPI 2.39 The GDP deflator – which measures the price of all domestically produced goods and services – is forecast to grow largely in line with CPI inflation throughout the forecast We expect the GDP deflator to grow by 3.2 per cent in 2025 before slowing down to 1.7 per cent in 2026 The latter is slightly lower than our forecast for CPI inflation of 2.1 per cent as higher energy prices temporarily lower the UK terms of trade GDP deflator growth averages around 2 per cent a year cumulative growth in the GDP deflator between 2024-25 and 2029-30 is forecast to be marginally lower as there is more spare capacity in the domestic economy in the first two years of our forecast 2.40 Recent data suggest that the labour market continues to loosen with vacancies falling and the unemployment rate rising The loosening likely reflects weak economic growth and subdued business confidence weighing down on labour demand The increase in employer NICs is also likely to be contributing to falling recruitment and rising redundancies we have not incorporated any impact of the Government’s Plan to Make Work Pay as there is not yet sufficient detail or clarity about the final policy parameters we were also unable to incorporate supply-side effects of the policies in the Government’s Pathways to Work Green Paper due to insufficient information on their effects (see Box 3.2 in Chapter 3) We plan to include the effects of both in our next forecast which currently make labour market forecasts particularly uncertain the LFS now uses a more up-to-date population base (see paragraph 2.20) But it is still not capturing the latest upward revisions in migration outturn data which are expected to further increase the LFS population base in the next reweighting sampling issues and resulting biases remain in the LFS which mean that participation and employment rates are likely to still be underestimated 2.42 The employment rate is forecast to decline slightly from 60.5 in the second half of 2024 to 60.2 per cent in 2029 as population ageing weighs on participation (Chart 2.12 The starting point is 0.6 percentage points higher than previously forecast and up from 60.2 in the first half of 2024 This is likely in part due to issues with the LFS as other employment measures Population growth means that cumulative employment growth over the forecast is around 1.2 million the level of employment is estimated to be around ½ million higher in the outturn than in October and this gap is retained throughout the forecast 2.43 We expect the unemployment rate to peak at 4.5 per cent (1.6 million people) in 2025 as spare capacity opens up before falling to its estimated structural rate of 4.1 per cent in 2028 (Chart 2.12 The unemployment rate has been trending up since the post-pandemic trough of 3.8 per cent in 2022 albeit with some volatility likely due to issues with the LFS The general trend is in line with wider indicators of a cooling labour market as labour demand weakens the unemployment rate is 0.4 percentage points (around 160,000 people) higher in 2025 while our estimated structural rate is unchanged 2.44 We forecast nominal earnings growth to ease from 4.7 per cent in 2024 to 4.3 per cent in 2025 (Chart 2.13, left panel). Nominal earnings growth remained strong in the second half of 2024 and annual growth was 5.5 per cent in the fourth quarter.[10] The recent strength has been driven by a combination of the timing of backdated public sector pay settlements and resilient private sector growth The near-term outlook remains relatively strong with the forecast for the last quarter of 2025 broadly in line with surveys of pay settlement growth expectations of around 3 to 4 per cent average nominal wage growth is 0.7 percentage points higher than the October forecast the ongoing loosening in labour market conditions and the rise in employer NICs should eventually weigh on the outlook for wage growth real earnings grow by 1.4 per cent in 2025 before stagnating in 2026 and 2027 (Chart 2.13 Real wage growth is below productivity growth in the middle years of the forecast as firms rebuild profit margins We expect firms to have more scope to pass on higher costs from increased employer NICs to workers as the labour market continues to loosen Real wage growth then begins recovering towards productivity growth in the medium term real earnings growth is 0.3 percentage points higher in 2025 as wage settlement expectations have held up relative to weak productivity growth and falling inflation Growth is broadly unchanged from October over the rest of the forecast a series of significant shocks has contributed to falls in labour market participation with much of the latter imported from abroad real household disposable incomes have held up surprisingly well This was initially a result of substantial government support and due to a higher share of income going to labour as company profit margins have been squeezed we assume that these shocks will be passed onto households and recent experience suggests this will occur through real wage adjustment rather than through higher unemployment we expect firms to rebuild profit margins and the labour share of income to fall back slightly 2.47 We expect real household disposable income (RHDI) per person to grow at an average of around ½ per cent a year in the five years from 2025-26 to 2029-30 (Chart 2.14, left panel).[11] But growth is projected to vary significantly around this average first slowing sharply from 2½ per cent in 2024-25 to almost no growth in 2027-28 This is driven by four factors: (i) lower real wage growth as firms rebuild profit margins; (ii) non-labour income growth returning to medium-term trends; (iii) an increase in household taxes as firms pass employer NICs onto wages and income tax thresholds remain frozen; and (iv) slower benefits growth due to a rising state pension age and welfare measures announced since October RHDI per person growth picks up to average ⅔ per cent a year in 2028-29 and 2029-30 as the freeze on income tax thresholds ends and real wage growth increases stronger real wage growth means RHDI per person grows slightly more quickly across the forecast Aggregate RHDI growth averages 1 per cent a year across the forecast while population growth averages just under ½ per cent a year 2.48 Policy measures lower RHDI per person slightly – around ¼ per cent by 2029-30 The main driver is lower benefit income due to the Government’s welfare reforms as higher productivity raises wages and a larger housing stock means more compensation for housing services Yet three quarters of the extra income from housing services comes as ‘imputed rent’ – what homeowners would receive if they rented out their home This makes the boost less tangible for households 2.49 The household saving rate (adjusted to exclude imputed pension contributions) rose from 2¾ per cent in 2023 to an estimated 6¼ per cent at the end of 2024 We expect the saving rate to hold around this level in 2025 before falling steadily over the rest of the forecast going below 3¼ per cent by the start of 2030 (Chart 2.15) Household saving has risen in recent years as resilient real wages and rising net interest income have supported RHDI while higher interest rates and greater uncertainty have incentivised saving We expect these factors to unwind over the forecast prompting households to lower their saving rate back towards historical averages This allows households to maintain a steady share of consumption in GDP Policy measures boost the saving rate slightly as households look to fund higher residential investment driven by the planning reforms But the difference is less than ¼ percentage point by the start of 2030 downward revisions to outturn mean we expect a lower saving rate across most of the forecast 2.50 Real private consumption is expected to grow by 1.5 per cent a year on average over the forecast This is broadly in line with the October forecast as higher growth in household income is offset by slightly shallower fall in the household saving rate Consumption growth was weak in 2024 and near-term indicators including consumer sentiment surveys and intelligence from the Bank of England’s Agents network we expect consumption growth to increase from 1.2 per cent in 2025 to 1.8 per cent in the final year of the forecast Policy measures are expected to weigh slightly on consumer spending in the latter half of the forecast as a reduction in welfare benefits lowers household incomes and the saving rate is slightly higher to help fund the increase in residential investment There are risks in both directions around our consumption forecast reflecting uncertainty around future real wages and household saving 2.51 Profits as a share of GDP are forecast to fall to 14.3 per cent in 2025 a level last seen in 2010 after the global financial crisis before recovering to 15.4 per cent in 2029 (Chart 2.16 The profit share dropped from 16.2 per cent in 2019 to 15.1 per cent in 2024 as margins were eroded by firms granting workers above-productivity increases in real wages The net rate of return on business sector capital has also been on a steady downward trend from 12 per cent in 2015 to 9 per cent in the first half of 2024 We expect the profit share of GDP to fall further in 2025 as wage settlement expectations have continued to outpace productivity growth and inflation and as the employer NICs rise initially hits profits The profit share then gradually increases over the rest of the forecast as we assume firms rebuild their margins and pass on more of the costs from the employer NICs rise to higher consumer prices and lower nominal wages 2.52 Real business investment is expected to grow by an annual average of 1.3 per cent over the forecast period Downward revisions to the level of business investment over the past three years left it only 0.6 per cent above its pre-pandemic level in the fourth quarter of 2024 compared to 3.9 per cent higher in our October forecast Recent falls in business sentiment mean we think investment growth will remain weak in the near term This relatively subdued recovery in business investment from the pandemic is consistent with the drop in the rate of return on capital and rises in interest rates As profitability and the rate of return recover and interest rates fall we expect business investment growth to pick up from 2026 and return to around the same level as our October forecast by 2027 (Chart 2.16 real government consumption and investment is expected to rise from 24.2 per cent in 2024 to 24.7 per cent in 2029 the largest part of government expenditure is expected to grow by 2.0 per cent a year on average over the forecast Real government investment is expected to grow by 1.4 per cent on average over the forecast an increase of 0.7 percentage points on our pre-measures and October forecast Stronger growth in 2025 relative to October largely reflects historical ONS revisions to outturn which we think are mostly noise and provide no signal about the medium-term level the difference reflects a change in the composition of departmental spending (DEL) This is driven by increased defence spending which is relatively capital intensive and a reduction in Official Development Assistance which is less capital intensive (see Chapter 5 for details) we explore alternative scenarios assessing how different US and global trade policies could impact the UK economy The new US administration has announced new tariffs on a range of imports from its trading partners prompting responses from some countries affected Both US and other countries’ trade policies have been subject to frequent changes over recent weeks and the future direction for trade policy is highly uncertain Our central forecast for global output aligns with the IMF’s January World Economic Outlook Update so does not take account of the new tariffs announced by the US and other countries since January we outline three illustrative scenarios to show the potential impact of higher US and global tariffs on UK output and inflation highlighting the primary transmission channels and their probable effects The fiscal impacts of these scenarios are presented in Chapter 7 The UK economy is relatively trade-intensive compared with other economies in the G20 UK trade (imports plus exports) as a share of GDP is around 64 per cent above the G20 average of 55 per cent and far higher than the US at 25 per cent.a While the US is the UK’s second-largest trading partner (after the EU) the composition of our trade with the US is skewed toward services rather than goods The US accounted for 15 per cent of the UK’s goods exports and 10 per cent of its goods imports in 2023 representing 27 per cent of the UK’s exports and 19 per cent of its imports The EU as a whole remains by far the UK’s largest trading partner contributing about 50 per cent of the UK’s trade roughly two-thirds of which is trade in goods accounts for less than 10 per cent of UK trade and is heavily skewed towards goods imports The UK’s trade in goods with the US is broadly in balance.b The major broad categories of goods which the UK exports to the US include machinery Meanwhile UK imports from the US are mainly machinery Economic theory and empirical evidence suggest that higher tariffs reduce the trade intensity of output and so reduce productivity and real GDP over the long run.c Lower overall trade intensity tends to reduce productivity as it restricts a country’s ability to exploit its comparative advantage and the economies of scale that come from accessing overseas markets there are a number of channels through which this can affect their economy depends on the constellation of tariff policies in place To explore the potential impact of rising US and global tariffs on the UK economy we construct three stylised scenarios for trade policy in the US and rest of the world.d These estimates are drawn from a range of models and trade scenarios from other institutions we assume that tariff rates rise at the start of the financial year 2025-26 (1 April 2025) and remain permanently elevated As tariffs provide a one-time shock to the price level and we assume that the Bank of England looks through the initial increase in inflation In addition to the direct impact of higher tariffs there is an increase in trade policy uncertainty which further dampens economic activity in the first few years of the scenarios.e the US increases tariffs levied on goods arriving from China and these countries retaliate equivalently GDP growth in these countries slows while prices rise This leads to UK GDP being around 0.2 per cent lower than in our central forecast in 2026-27 as demand for UK exports slows and uncertainty weighs on UK economic activity where demand for UK goods rises as they are relatively cheaper UK GDP is largely unchanged from our central forecast by 2029-30 the US goes further by increasing tariffs on goods arriving from all other countries retaliate against the US by imposing their own equivalent tariffs on US goods The effects of these channels are highly uncertain in both magnitude and even direction The impact of tariffs crucially depends on the ability of importers and consumers to substitute away from goods whose prices increase due to tariffs in a scenario where the UK imposes tariffs on US imports the impact on UK output and inflation would be smaller if domestic or non-US substitutes were more readily available There will also be frictions as new trading regimes are implemented sudden increases in trade barriers could disrupt supply chains but predicting these effects is challenging due to the complexity of global value chains Uncertainty about future changes in trade policies may delay investment potentially reducing not just activity in the near term but potential output in the medium term Our scenarios incorporate estimates consistent with the static effects of increased trade barriers on the medium-term productivity level dynamic effects on productivity (longer-lasting effects on growth rates) are likely to further weigh on UK and global output Reduced openness to trade would hinder access to the new technologies and knowledge sharing that support innovation the size of these effects remains uncertain Various external bodies have also estimated the potential impact of higher tariffs on UK GDP under differing tariff regimes Our 2022 Fiscal risks and sustainability report also included estimates of a more severe ‘trade war’ scenario involving reciprocal tariffs levied by all countries on each other Chart D shows that our estimates for the GDP impact of the three scenarios described above are quite close to the average of other estimates for that level of tariffs variations in trade data due to differing methodologies especially in classification and pricing methods Asymmetry analysis for trade in goods statistics between the UK and the USA for more information on the theoretical and empirical links between trade intensity and economic growth d) These are scenarios and do not reflect stated government policy Does Trade Policy Uncertainty Affect Global Economic Activity? Washington: Board of Governors of the Federal Reserve System f) This is in line with empirical evidence for the elasticity of demand for UK exports in the long run Understanding recent developments in UK external trade 2.55 We expect the current account deficit to widen from 2¾ per cent of GDP in 2024 to an average of around 3¼ per cent from 2025 onwards going from 1 per cent of GDP in 2024 to ¾ per cent by 2029 investment income pulls the current account further into deficit As global short-term interest rates fall further below UK rates the investment income deficit widens from 1¼ per cent of GDP in 2024 to nearly 2 per cent by the start of 2030 2.56 Strong earnings growth and precautionary saving together mean we forecast the household sector to remain in a surplus of around 3½ per cent of GDP in 2025 (Chart 2.17) This surplus then falls back towards historical averages A persistent current account deficit means we forecast the overseas sector to lend an average of 3¼ per cent of GDP across the forecast The corporate sector deficit widens further over the next two years in our forecast reaching 3 per cent of GDP in 2026 as the squeeze on profit margins continues This deficit then narrows steadily to 1½ per cent of GDP by 2029 as firms rebuild margins and pass on tax increases to wages and prices We expect the public deficit to narrow gradually across the forecast from around 5½ per cent of GDP in 2024 to 2¼ per cent in 2029 2.57 In this forecast we have incorporated the effects of the revised National Planning Policy Framework (NPFF) announced in December 2024 Most of the difference from our October housing market forecast is driven by these measures In this section we present our central forecast for housing supply which is a combination of a little-changed pre-measures forecast and the impact of the residential planning reforms We present a more detailed analysis of the demand and supply impact of these reforms in Chapter 3 2.58 Cumulative net additions to the UK housing stock are forecast to be 1.3 million from 2025-26 to 2029-30 reaching 305,000 a year by 2029-30 (Chart 2.18) total net additions across the five-year forecast period are 137,000 higher This difference reflects the combination of a small downward revision in our pre-measures forecast and a large positive impact from the planning reforms: 2.59 Property transactions are forecast to rise from around 290,000 a quarter at the end of 2024 to around 370,000 a quarter by 2029 this is 9,000 higher each quarter than our October forecast largely due to the planning reforms transactions are volatile due to movements in sales around the stamp duty rises at the end of March 2025 we assume that the turnover of the housing stock returns towards historical average rates We expect that the planning reforms will increase housing transactions on average by 4.0 per cent in the last three years of the forecast as additional completed homes are transacted This means we now assume that around 1.2 per cent of the total housing stock gets transacted every quarter in the medium term 2.60 Residential investment growth is expected to pick up materially over the forecast rising from -1.9 per cent in 2025 to a peak of 8.8 per cent in 2027 The increase reflects the expected monetary policy loosening over this period and reforms to the planning system announced by the Government These reforms are expected to increase the level of residential investment by 10 per cent at the end of the forecast This captures the net impact of a rise in investment in new buildings and higher resulting transfer costs partly offset by lower investment in improvements These effects are discussed in more detail in Chapter 3 mortgage rates are around 0.2 percentage points higher on average over the forecast driven by higher interest rate expectations (Chart 2.19 2.62 The average house price in the UK is expected to rise over the forecast from around £265,000 in the final quarter of 2024 House prices rose at an annual rate of 3.9 per cent in the final quarter of 2024 0.9 percentage points higher than in our October forecast We expect this momentum to ease over the year as higher interest rates continue to weigh on demand House price growth is 2.8 per cent in 2025 and averages 2.5 per cent thereafter broadly in line with growth in nominal earnings We expect the 0.5 per cent increase in the housing stock as a result of the planning reforms will reduce the average house price by around 0.8 per cent in 2029 average annual nominal GDP growth in the fiscal years 2025-26 to 2029-30 an important driver of our fiscal forecast is broadly unchanged from our October forecast ONS revisions mean nominal GDP in both 2024-25 and 2029-30 is 2 per cent higher than our October forecast 2.64 Our central forecast for cumulative real GDP growth from 2024 to 2029 is 0.8 percentage points higher than the average of other forecasters (Chart 2.21) This likely reflects differences including underlying productivity growth assumptions and the effects of policy measures included in this Spring Statement – most notably the impact of the planning reforms The Bank of England’s forecast for average annual real GDP growth over the next three years is 0.3 percentage points lower than our central forecast This likely reflects the Bank’s weaker productivity growth assumption and a more persistent negative output gap 2.65 Our forecast for average annual CPI inflation over the next three years is lower than the Bank’s forecast by 0.3 percentage points reflecting factors such as lower expected wage growth Compared to the average of other forecasters our CPI inflation forecast is 0.1 percentage points higher this year and 0.3 percentage points lower next year This likely reflects different energy price and wage growth assumptions Our unemployment projection for this year is broadly similar to the Bank’s forecast and slightly lower than the average of other forecasters likely reflecting different assumptions about the level of slack in the economy over the forecast period the Government provides us with draft estimates of the fiscal cost or gain of each policy measure it is considering which then undergo an iterative scrutiny process the Government chooses which measures to announce and which costings to include in its policy decisions table For these costings we choose whether to certify them as ‘reasonable and central’ and whether to include them – or alternative costings of our own – in our forecast We have certified all but two measures in this forecast Relatively small changes were made to the policy parameters of the universal credit standard allowance increase and the reduction in the generosity of the universal credit health element measures following the costings certification deadline we were not able to certify the final version of these costings but have used the Government’s estimates in this forecast and will finalise the certification process for our next forecast We do not expect this will have a material impact on the costings we have used 3.3 This forecast incorporates the economic and fiscal implications of fiscal policy measures that have been announced since the Autumn 2024 Budget the direct effect of these measures delivers a reduction in spending and increase in tax revenues over the medium term which together reduce borrowing by £6.3 billion (0.2 per cent of GDP) in 2029-30 Because some of the changes to departmental expenditure reduce current spending but increase capital spending in the final year of the forecast the direct effect of policy measures on the current balance is greater at £10.9 billion (0.3 per cent of GDP in 2029-30) 3.4 The largest components are changes to public spending which lower borrowing by £4.0 billion in 2029-30: 3.5 Tax decisions raise an average of £1.6 billion a year over the forecast period 3.6 In addition to the direct fiscal effects of measures Table 3.1 also includes their indirect effects on the public finances via the wider impacts they have on the economy As well as the spending and tax measures set out above this forecast includes estimates of the indirect effects of the Government’s residential planning reforms overall policy changes are judged to deliver a small boost to demand in the near term while the planning reforms are estimated to increase potential output by 0.2 per cent in the medium term These effects drive an increase in tax receipts and reduction in debt interest costs which reduce borrowing by £3.4 billion by 2029-30 3.8 The profile of the fiscal tightening at this event is backloaded with material reductions in borrowing only in the final years of the forecast Chart 3.2 compares the policy package at this event against other contractionary policy events since June 2010 This shows that the impact of policy follows a relatively typical profile with the reduction in borrowing increasing over the forecast Several factors are likely to influence the profile of fiscal tightenings the timing of individual tax and spend changes and the nature of fiscal rules which often bind in the later years of the forecast Our economy forecast accounts for the economic impacts of announced government policies The demand-side effects of fiscal policy are calculated using a set of fiscal ‘multipliers’ which are drawn from empirical literature and reviewed periodically.a These capture the impacts of measures on demand through changes to private incomes and consumption We typically assume these effects taper to zero as the Bank of England uses monetary policy to bring the economy back to the trend path of potential supply The impact of policies on the supply side of the economy is also accounted for if credible evidence suggested that measures will have a significant the direct effects of the fiscal policies incorporated in this forecast increase borrowing very slightly in 2025-26 before reducing borrowing from 2028-29 onwards As a result of the reallocation of spending from mainly overseas Official Development Assistance (ODA) to mainly domestic spending on defence the small near-term demand-side boost to the economy is larger than might otherwise be expected increasing real GDP by a peak of 0.06 per cent in 2026-27 (Chart A As described from paragraph 3.36 of this chapter we have also incorporated an estimate of the impact of the Government’s residential planning reforms on both supply and demand We estimate these reforms will increase housebuilding which leads to a modest temporary boost to demand by raising near-term residential investment (blue bars) these reforms provide a permanent boost to the supply capacity of the economy via increases in construction sector productivity and the flow of housing services which reaches 0.2 per cent of GDP in 2029-30 (green and yellow bars) we have only made one adjustment to the forecast on the supply side of the economy in relation to the welfare reform package announced in the March Pathways to Work Green Paper.c This is the reversal of work capability assessment (WCA) reforms announced by the previous Government in Autumn 2023 As we had previously adjusted the forecast to account for the original policy we are now reducing labour supply by 8,000 in average-hours-equivalent terms to remove its effect This reduces potential output by 0.01 per cent in 2029-30 (Chart A We have not incorporated the labour supply effects of any other new welfare and employment support measures in our forecast due to insufficient information on both the specification of policies and their effects in time for us to do so we will fully assess the employment implications of the wider welfare reform package ahead of our next forecast We also expect the policies in this forecast to provide a very small boost to CPI inflation increasing the price level by less than 0.1 per cent by the end of the forecast a) See Box 2.2 in our December 2019 Forecast evaluation report and Box 2.1 in our November 2020 Economic and fiscal outlook we assume that the reallocation of funding from ODA to defence spending means that a greater share of public spending will be spent in the UK than would otherwise be the case Pathways to Work: Reforming Benefits and Support to Get Britain Working Green Paper we assess the most significant new policies announced since the Autumn 2024 Budget and their fiscal implications We focus on measures with the largest direct or indirect fiscal impacts those with complex interactions with other policies which included a four-year freeze to most working-age benefits and a package of reductions to tax credits and UC It puts overall welfare spending on a slightly downward trajectory as a share of GDP over the medium term rather than the flat path in the October forecast (see Chapter 5) 3.12 The economic and fiscal impacts of these policies are very uncertain due to the complex interaction between trends in health and the economy and the operation of the benefits system (as our 2024 Welfare trends report explored) in a number of areas we currently have limited evidence available to assess the full impact of policy changes Welfare reforms incorporated into previous OBR forecasts have such as the transition from disability living allowance to PIP as explored in our January 2019 Welfare trends report Others have taken far longer to implement than expected as was the case for the roll-out of universal credit And others have been reshaped or reversed at subsequent fiscal events 3.13 We will update these costings at our next forecast alongside assessing the impact of other reforms in the Green Paper which we have not incorporated in this forecast because of a lack of firm details or due to ongoing consultations (see Box 3.2) for example the proposed abolition of work capability assessments (WCA) will also likely affect the cost of measures included in this forecast Box 3.2 also explains why at this event we have not yet made a full assessment of the potential implications of all the welfare measures on labour supply 3.14 The Government has increased the universal credit standard allowance rates. This decision increases rates by 2.3 per cent in 2026-27, rising to 4.8 per cent in 2029-30, relative to a baseline assumption of annual CPI uprating. Over 6.5 million families projected to be in receipt of UC in 2026-27 will be entitled to the standard allowance.[18] By 2029-30 this change increases the average UC award including all UC elements from £244 to £249 per week relative to the baseline uprating assumption at a provisionally estimated total cost of £1.9 billion 3.15 The static cost of this measure, which reaches £1.8 billion by 2029-30, reflects the cost of higher UC awards being made to the projected baseline stock of UC recipients in the forecast.[19] The costing also includes a behavioural assumption that around 8,000 eligible non-recipient families newly take up UC due to the slightly greater financial incentive to do so which slightly increases the cost of the measure by almost £50 million in 2029-30 3.16 The Government has announced a series of changes to the universal credit health element which 2.7 million families are projected to receive as part of their UC award in April 2026 when these policies take effect Most claimants are currently required to undertake a work capability assessment which assesses how their reported health condition restricts their capability to work with claimants who are classified as having ‘limited capability for work and work-related activity’ (LCWRA) eligible to receive the UCHE the policy changes to the value of the UCHE and to the WCA are estimated to reduce spending by £1.7 billion in 2029-30 The policies included in this Spring Statement 3.17 The value of the UCHE has been frozen at £97 per week for the four years from April 2026 rather than CPI uprating assumed in the baseline (which would have taken it to £107 per week by 2029-30) for those who joined the LCWRA caseload prior to that date For people newly classified as LCWRA from April 2026 onwards the UCHE is halved and then frozen for four years at £50 per week 3.18 These changes are estimated to reduce spending by £3.0 billion in 2029-30, reflecting a £1,100 average reduction in overall annual UC awards for the 3.0 million individuals expected to be in receipt of the UCHE by that date.[20] The additional premium to protect the incomes of UCHE recipients after April 2026 with the most severe This is because DWP has confirmed to us that key components of the policy including the value of the premium and the groups of people impacted 3.19 This is a provisional costing which is highly sensitive to judgements on the composition of the baseline LCWRA caseload and on the behavioural impacts of the measures four-fifths of the pre-April 2026 caseload remains in receipt of the UCHE With the overall LCWRA caseload expected to rise gradually over the forecast by 2029-30 this means that 73 per cent of the LCWRA caseload is estimated to be pre-April 2026 caseload and the remaining 27 per cent is estimated to be new claimants receiving the lower UCHE rate The savings in 2029-30 are nearly six times as large for individuals in the latter group (because they receive the halved UCHE award) as the former demonstrating the sensitivity of these ‘stock’ vs ‘flow’ shares for the estimated savings 3.20 There are several potential behavioural responses to this policy We provisionally estimate that behavioural responses reduce the static saving by £0.4 billion through four channels: 3.21 The Government has announced that the three changes to the WCA descriptors, which the previous Government announced in November 2023, will not go ahead.[21] We have therefore removed from the forecast the previously estimated savings from this measure which reached £1.6 billion by 2029-30 We have also reduced labour supply by 8,000 in average-hours-equivalent terms to remove the effect of the original policy from the forecast 3.22 The Government will reintroduce reassessments for claimants placed in the LCWRA group prior to April 2026 with certain short-term prognoses (such as high-risk pregnancies or cancer treatment) or who faced substantial risk to their physical or mental health The savings from this policy are estimated to reach £0.3 billion in 2029-30 due to reassessments leading to more claimants leaving the LCWRA caseload The key uncertainties in this costing are the level of off-flows following reassessment and whether there is sufficient workforce capacity for the reassessments to take place 3.23 The Government has also announced reforms to personal independence payment the main disability benefit for working-age adults which are estimated to save £4.1 billion in 2029-30 These reforms focus on the PIP gateway assessment of claimants’ ability to perform certain everyday tasks (10 daily living descriptors) and to get around (two mobility descriptors) For both the daily living and mobility components a claimant is currently entitled to the standard PIP rate if they receive eight points across the relevant descriptors and to the enhanced PIP rate if they receive 12 points of which 1.6 million received the standard rate for daily living and 1.9 million the enhanced rate claimants will be required to score four points in at least one of the 10 daily living descriptors to qualify for the daily living component The static costing of this policy would reduce spending by an estimated £7.9 billion by 2029-30 and would reduce the number receiving the PIP daily living component by an estimated 1.5 million people (32 per cent) This is estimated simply on the basis that 58 per cent of onflows and 52 per cent of award reviews among the existing stock of claimants qualify for the daily living component without scoring four points or more in any descriptor 3.25 The behavioural response significantly reduces the estimated number of people who lose the PIP daily living component to 800,000 (16 per cent of those receiving the daily living component), with 400,000 of these leaving the PIP caseload entirely due to not receiving the mobility component.[22] This reduces the static savings by around half (£4.0 billion) by 2029-30 This is a highly uncertain judgement which reflects: 3.26 In addition to the behavioural effects on the PIP caseload outlined above we have also assumed that a proportion of those whose PIP entitlement is affected by the policy will claim universal credit to compensate for their income loss The magnitude of all of these behavioural responses is highly uncertain and therefore means there are significant upside and downside risks to the costing of this policy 3.27 This measure aims to boost the number of assessments completed per day by around 15 per cent from 5,200 to 6,000 daily assessments which is estimated to save £0.2 billion in 2029-30 This implies an increase of 30 full-time equivalent (FTE) healthcare professionals each month between March 2026 and May 2028 DWP previously increased FTE healthcare professionals by an average of 40 per month between 2021-22 and 2023-24 there is a risk that further expansion will be more difficult to deliver given the current higher starting point and the intention (set out in the Pathways to Work Green Paper) to move away from remote assessments In this forecast we have incorporated the direct fiscal impacts of several welfare policies recently announced in the Pathways to Work Green Paper published on 18 March as set out in paragraphs 3.10 to 3.27.a The Green Paper includes some additional measures that we have not incorporated into this forecast because policy parameters were not sufficiently specified or because significant aspects of the measures would be the subject of consultation which is consistent with our standard approach to policy costings We will incorporate an estimate of the costs of these policies in a future forecast once the final details have been confirmed The most significant policy that has not been costed at this forecast is the stated intention to remove work capability assessments (WCA) eligibility for the universal credit (UC) health element would be decided through the personal independence payment (PIP) assessment Several key policy details are still outstanding on the proposal This includes how entitlement will be decided for the stock currently in receipt of the UC health element but not PIP and how entitlement for the UC health element will be decided in Scotland where working-age disability benefits are devolved We would expect this policy to have a material fiscal impact on incapacity and disability benefit spending but potentially also to affect the costings of some of the measures included at this event Several other policy ambitions announced in the Green Paper could affect the costings of the changes to the PIP gateway and the UC health element The Government has said that it intends to fully review the PIP assessment which could potentially lead to a wider reshaping of eligibility and also that it will increase face-to-face PIP assessments which could affect both approval rates at assessment and assessment capacity The Government has also said it will consult on what support those who lose PIP due to the tightened qualifying criteria should receive The proposed additional premium for new UC health element recipients after April 2026 will reduce the savings from the reduced UC health element generosity measure in this forecast but the value of the premium and eligibility criteria have not yet been set We have not made a comprehensive assessment of the labour supply impacts of those elements of the Green Paper that we have incorporated into the fiscal forecast The individual measures’ labour market impacts are complex to assess and would have interacting effects The Government did not provide us with a comprehensive and robust analysis of these potential effects able to develop our own analysis of their net impact on labour supply some of the wider Green Paper reforms set out above which are not included in the fiscal forecast could also have labour market implications We will make a full assessment of the Green Paper policies’ effects ahead of our next forecast following engagement with government analysts and external experts we judge that their effects fall into three groups: The only welfare policy in this Spring Statement whose effects have been incorporated into our employment forecast at this event is therefore the reversal of the previous Government’s November 2023 policy to change elements of the WCA criteria We have taken the equivalent increase in employment out of the forecast which reduces employment by 16,000 (and labour supply by 8,000 in average-hours-equivalent terms) in 2029-30 b) We use these to assess responses to changes in financial work incentives The labour supply effects of the Autumn 2023 National Insurance Contributions cut these are changes to the UC health element which reduce new claimants’ awards and freeze existing claimants’ awards; and changes to disability benefits which introduce more stringent criteria to access PIP such as introducing WCA reassessments for claimants with a short-term prognosis and increasing the volume of PIP assessments would have negligible effects on our labour supply forecast DWP’s now-published evaluation of a previous disability employment scheme which we previously drew on in forming our indirect effects judgements around the intervention that is currently known as ‘Connect to Work’ The Government has also recently published analysis of the effect of some of its other interventions The impact of additional Jobcentre Plus support on the employment outcomes of disabled people 3.28 The Government’s revised spending plans at this event include several policy decisions which affect the current (day-to-day) and capital spending of central government departments these increase total departmental spending by £2.2 billion a year on average and by £0.7 billion in 2029-30 We discuss departmental spending in more detail in Chapter 5 3.29 The Government has announced a further set of HMRC compliance and debt collection measures in the Spring Statement which are estimated to raise an additional £1.0 billion by 2029-30 3.31 The historic and estimated future path of the tax gap suggest both upside and downside risk to the forecast The projected decrease in the tax gap would follow a period since around 2017-18 where it has been relatively stable despite previous governments introducing a wide range of measures aimed at increasing tax compliance over this period HMRC has been successful in previous periods though this may in part have been driven by wider economic trends such as diminishing use of cash as we discussed in Box 4.1 of our March 2024 Economic and fiscal outlook (EFO) 3.32 Tax debt available for pursuit has been at historically high levels since the pandemic The value of tax debt available for pursuit stood at £147 billion in 2023-24 well over twice the average pre-2020 level of £63 billion Tax debt is expected to decline over the medium term both as new debt falls back toward pre-pandemic levels and as a result of existing HMRC debt collection activity 3.33 To account for these risks in our policy costings we assume that the returns from targeting tax debt and compliance diminish over the forecast there remains significant uncertainty around the yield that will be generated from these measures We intend to undertake further work with HMRC on the approach to tax debt collection and compliance costings including by reviewing the interaction between the overall receipts forecast and the forecasts for both tax debt stocks and flows 3.34 The measures which increase the numbers of HMRC compliance and debt officers require significant additional DEL funding across the forecast period As HMRC’s full DEL settlement has not been agreed beyond 2025-26 consistent with our approach in previous EFOs we requested additional information from the Government to satisfy ourselves that these scorecard measures would be truly additional to the baseline activity We also asked the Treasury to provide assurances that HMRC would receive the funding necessary to achieve the baseline compliance activity implicit in our forecast The Treasury has provided this assurance and the funding provision is set out in Table 3.5 We will look to revisit HMRC’s compliance funding provision in the autumn following the Spending Review 3.35 The Charter for Budget Responsibility requires us to assess the long-term impacts of new government policies We therefore report on new policies with long-run economic and fiscal impacts especially where these differ from the effects that will have occurred by the five-year timeframe at which we are required to produce our medium-term forecasts these include the Government’s residential planning reforms the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade agreement and the changes to the universal credit health element 3.36 At this event we have estimated the economic and fiscal impacts of the revised National Planning Policy Framework (NPPF) announced in December.[25] The NPPF contains several measures including changes to local housebuilding targets requirements for some local authorities to meet their targets by releasing parts of the green belt for housebuilding the strengthened presumption in favour of sustainable development and ‘Golden Rules’ which set out affordability and public infrastructure requirements for developments on the green belt As this is largely a regulatory policy change it does not have a direct fiscal impact but nonetheless affects the fiscal forecast via its effect on the economy requires local authorities to release land for further development unless the adverse impacts of doing so significantly outweigh the benefits Given the uncertainties around these estimates in Box 3.3 we present alternative scenarios for both higher and lower rates housebuilding in response to these reforms the pre-policy housebuilding forecast shown in Chart 3.4 takes into account higher interest rates and the effect of environmental and building safety legislation we have also accounted for the direct fiscal revenues associated with the building safety levy which was legislated for in the Building Safety Act 2022 and is a tax paid by developers on new build homes requiring building control approval in England The levy will come into effect in October 2026 and is estimated to raise an average of £0.3 billion in the final two years of the forecast 3.39 Greater housebuilding affects both the demand and supply sides of the economy. On the demand side, we estimate that the effect of more housebuilding is worth 0.6 per cent of GDP by 2029-30, due to greater residential investment. Most of this increase (the 0.5 per cent shown in the blue bars in Chart 3.5) does not reflect an increase in the economy’s supply capacity.[27] So given little spare capacity in the economy in the medium term we expect there to be some ‘crowding out’ of this increased demand via adjustments in interest rates and relative prices net trade and other residential investment to improve existing dwellings (purple we estimate that these reforms could raise the level of potential output by 0.2 per cent by 2029-30 which is the combined effect of increased construction sector productivity and increased housing services: 3.41 We would expect the GDP effects that operate through these channels to increase as the housing stock increases over time further increases to potential GDP from labour mobility and agglomeration effects may become more material over time The potential long-run impact of these reforms on GDP is further discussed in paragraph 3.44 Our central forecast assumes cumulative net additions to the housing stock in the period to 2029-30 are under 1.3 million we estimate 170,000 additions are due to the Government’s residential planning reforms and these raise GDP by 0.2 per cent at the forecast horizon there are several significant uncertainties around this estimate capacity constraints in the housebuilding sector could prove more binding than assumed if growing demands on a limited construction workforce hinder housebuilders’ ability to deliver a rapid acceleration in the flow of new houses Or local opposition to reforms could prevent or delay housebuilding by more than we have assumed particularly given much of the additional development in the next five years is assumed to take place on current green belt land growing economies of scale and greater adoption of modular construction methods may enable sustained improvements in the sector’s efficiency and its capacity to build houses To illustrate the possible range of outcomes for housebuilding and potential output we would also expect some upward pressure on the average transacted house price as new builds typically transact at a higher price than the existing stock 3.43 The planning reforms have no associated direct fiscal implications but we estimate that the indirect effects will lower borrowing the £3.5 billion increase in receipts in from the indirect effects of Government decisions This is driven by the increase in GDP boosting general tax receipts and higher property transactions boosting stamp duty receipts Around a quarter of the increase in GDP due to planning reform reflects the higher imputed rents from a larger stock of owner-occupied housing which the Government does not tax directly and therefore has no direct impact on the fiscal forecast 3.44 Should these reforms continue to be in place beyond 2030 the corresponding impact on housebuilding should continue to grow potentially allowing yearly net additions to reach 320,000 by 2034-35 the resulting impact on potential GDP of higher construction sector productivity and housing services would increase from 0.2 to 0.4 per cent 3.47 Over the forecast period, the CPTPP is estimated to lower customs duty revenues by around £30 million a year. Over the longer term, lowered customs revenues will likely be more than offset by gains to both domestic producers and consumers from trade liberalisation. The Government has estimated that the agreement will lead to an increase in GDP of £2 billion (around 0.1 per cent of GDP) in the long run.[33] 3.48 Changes to welfare policy are expected to reduce welfare spending by £4.8 billion by the forecast horizon Most of these savings are likely to continue beyond the forecast period in a relatively predictable way savings from the reduction in generosity of the universal credit health element will significantly differ in the long term This is because most of the savings from this measure arise from halving the UCHE for claimants newly classified as LCWRA from April 2026 onwards durations in the LCWRA group are long and off-flow rates low so this will take significant time to work its way through the caseload when all claimants have flowed onto the benefit after April 2026 we estimate this measure will save £8.5 billion a year (in 2029-30 prices) 3.49 We assign an uncertainty rating to all policy costings.[34] The measures that we have given a ‘high’ or ‘very high’ uncertainty rating are set out in Table 3.6 All highly uncertain measures included in this Statement are discussed in more detail elsewhere in this chapter 3.50 Since our October forecast the Government has introduced a number of new measures, and policy has become sufficiently firm to incorporate some previously announced measures. On the advice of Treasury classification experts and pending a decision by the ONS we are recording the following transactions in the following ways:[35] of the higher cost resulting from the increase to employer NICs to their employees via lower real wages the year in which the tax change is introduced we assumed firms pass on 60 per cent of the higher costs to workers and consumers via lower nominal wage increases and higher prices with the remaining 40 per cent absorbed by the employer in lower post-tax profits based on demand and supply elasticities for labour that 76 per cent of the total cost is passed through to employees via lower real wages leaving 24 per cent of the cost to affect profits and leading to a 50,000 downgrade to employment in average-hours-equivalent terms by 2029-30 Of the long-run pass-through of this cost to employees’ real wages we assumed four-fifths comes through lower nominal wages and one-fifth via higher prices We will monitor the available evidence and adjust our judgements if enough evidence to do so emerges 3.54 The extended producer responsibility (EPR) is a scheme which requires packaging producers to pay a fee for the packaging they supply to or import into the UK market effectively compensating local authorities for the cost of packaging waste management We previously captured EPR revenues as a fee received and spent within DEL so the new treatment of EPR revenues as a tax boosts receipts and decreases DEL fees by an equal and offsetting amount there was previously not enough detail on the fees for this to be reflected as a tax in our receipts forecast It will come into effect from April 2025 and is estimated to raise on average £1.6 billion a year between 2025-26 and 2029-30 The costing includes only a very small behavioural response to the policy from packaging producers and local authorities This is based on assessments by the Department for Environment that the policy is unlikely to have a material impact on rates of recycling or packaging waste volumes in the next five years 3.55 The Government has introduced technical changes to the rules around the Temporary Repatriation Facility (TRF) which relate to a subset of foreign income and gains that have previously been remitted to the UK and distributions from trusts These changes do not materially affect the costing of the TRF or any of the key behavioural judgements in the costing of the new non-domicile regime 3.56 Parliament requires that our forecasts only reflect current government policy when the Government sets out ‘policy ambitions’ or ‘intentions’ we ask the Treasury to confirm whether they represent firm policy We use that information to determine what should be reflected in our forecast we note them as a source of risk to our central forecast A full database of risks to this forecast and changes from previous updates is available on our website the Pathways to Work Green Paper contains several policy risks in particular from the abolition of the WCA Two other measures which pose risks to our forecast are: 4.1 Total public sector receipts are forecast to rise as a share of the economy from 39.9 per cent of GDP (£1.1 trillion) in 2023-24 to 41.7 per cent of GDP (£1.4 trillion) in 2028-29 and 2029-30 National Accounts taxes as a share of GDP (the ‘tax take’) are forecast to increase from 35.5 per cent in 2023-24 to 37.7 per cent of GDP in 2027-28 before stabilising at 37.5 per cent of GDP over the remainder of the forecast period This peak would be a historic high and a 4.6 percentage point increase on the pre-pandemic level of 33.2 per cent of GDP in 2019-20 4.2 The main drivers of the 2.1 per cent of GDP increase in the tax take from 2023-24 to 2029-30 are personal taxes particularly income tax and National Insurance contributions (NICs) The rise in personal taxes next year is driven by the employer NICs measures from the Autumn 2024 Budget and in the following two years by a combination of stronger average earnings growth and the freezing of personal tax thresholds until April 2028 There is also a boost to receipts from the Temporary Repatriation Facility (TRF) announced at Autumn 2024 Budget as part of the reforms to the non-domicile regime The tax-to-GDP ratio falls slightly over the final two years as the personal tax threshold freeze ends and there is a decline in some smaller taxes including fuel duty due to the rising share of electric vehicles 4.3 Relative to our October 2024 forecast (restated for Blue Book 2024 nominal GDP revisions),[39] National Accounts taxes as a share of GDP are 0.5 percentage points lower in 2024-25 but broadly unchanged over the remainder of the forecast The shortfall in 2024-25 against the October forecast is mainly due to lower-than-expected outturn receipts from corporation tax Much of this shortfall relates to 2023-24 liabilities and suggests that small company profits and dividends were more depressed than we expected by that year’s high and externally driven inflation and high interest rates The weakness in corporation tax also likely reflects weaker-than-expected profits growth in the second half of 2024-25 the shortfall in total receipts in 2024-25 is broadly offset mainly by stronger forecast growth in nominal earnings which pushes up income tax and NICs receipts The direct and indirect effects of policy included in this forecast increase the tax take by less than 0.1 per cent of GDP on average 4.4 The tax-to-GDP ratio is forecast to be 4.3 percentage points higher in 2029-30 than it was in 2010-11 following the financial crisis Over this period the tax-to-GDP ratio evolves in the following ways: 4.5 Chart 4.3 shows the contribution of government policy decisions to the 4.4 percentage point increase in the tax-to-GDP ratio from 33.2 per cent in 2019-20 before the pandemic to 37.5 per cent in 2029-30: 4.6 There is significant uncertainty around the forecast increase in the tax take the average absolute five-year forecast error for receipts as a share of GDP is 0.9 percentage points in addition to the substantial recent tax policy changes changes to the outlook for the tax-to-GDP ratio have been driven by revisions to the underlying forecast These revisions can be driven by changes to the economic drivers of tax receipts or by wider behavioural factors Chart 4.2 shows that much of the increase over the forecast period is expected to come from higher income tax (IT) The forecast for IT and NICs is very sensitive to nominal earnings growth which is assumed to grow by 18.7 per cent over the current forecast The CGT forecast is very sensitive to financial asset prices as well as to behavioural responses to policy changes The forecasts for all major taxes are also sensitive to the evolution of the tax gap a measure of the degree of tax compliance and debt which is discussed further in Chapter 3 of this EFO 4.7 Relative to the October 2024 forecast, and including the impact of policy measures, total public sector receipts are forecast to be £7.5 billion lower in 2024-25 (0.4 per cent of GDP) but an average of £3.2 billion a year higher between 2025-26 and 2029-30 (0.1 per cent of GDP)[41]: The latest forecast for 2024-25 public sector receipts is £7.5 billion (0.6 per cent) lower than we expected in October with much of the shortfall in self-assessed income tax in percentage terms this in-year change is the largest downward revision to receipts between an autumn and spring forecast since 2012 There have been larger recent upward revisions of 1.4 per cent in 2016-17 and of much greater magnitude in 2020-21 and 2021-22 during the pandemic The shortfall in self-assessed income tax and CGT and a portion of the shortfall in corporation tax pertains to 2023-24 liabilities (as these taxes are paid in the year after the liabilities arise) Initial evidence on the composition of the shortfall suggests it has been concentrated in receipts from small company CT income tax from partnerships and dividend income This may be because the high inflation and interest rates in 2023-24 decreased the profitability of small businesses by more than we anticipated This high inflation was externally driven and so for many small businesses will have increased costs by more than revenues the tax forecast models may not have adequately captured the effects of higher interest rates on small business expenditure and profits A significant portion of the CT shortfall relates to payments on profits in this financial year with CT from large companies £4.2 billion lower than expected in October This reflects weaker-than-anticipated profits in the second half of 2024-25 due in part to more persistent earnings growth squeezing profits This can also be seen in outturns for other taxes where stronger-than-anticipated nominal earnings mean that PAYE receipts are £1.2 billion higher than expected in October The latest year’s receipts data provide the starting point for the medium-term forecast changes such as these will typically drive a proportional change in the forecast across the medium term by effectively raising or lowering the level of the effective tax rate across the forecast The exception to this is where there is reasonable evidence to suggest that changes to the current year’s outturn reflect temporary or volatile factors After accounting for these two adjustments £4.5 billion of the overall £7.5 billion shortfall compared to October is assumed to be structural We are seeking to improve our approach to forecasting in-year estimates ahead of our next forecast in the autumn We will audit the existing range of approaches used to produce in-year estimates across the receipts forecasts to identify which produce the most reliable results We will also seek to use more timely sources of economic data and information from near-term economic forecasts to better inform the estimates We plan to discuss this further in future Forecast evaluation reports 4.8 Income tax (excluding self-assessment) is forecast to raise £260.3 billion in 2024-25 (9.0 per cent of GDP) This rise is driven by strong nominal earnings growth and frozen tax thresholds Receipts are then forecast to rise to £310.0 billion (9.6 per cent of GDP) in 2027-28 with growth continuing to be driven by the freezing of personal tax thresholds growth slows and receipts decline slightly as a share of GDP to £322.0 billion (9.3 per cent) in 2029-30 This is due to the end of the personal tax thresholds freezes in April 2028 and slower nominal earnings growth driven by the assumed fall back in the labour share to its historical average from its peak in 2025-26 non-SA IT is forecast to raise £2.0 billion more in 2024-25 and an average of £6.9 billion a year more over the rest of the forecast This is driven by stronger-than-expected PAYE receipts in 2024-25 and higher forecast nominal earnings growth in 2025 and 2026 4.10 NICs are forecast to raise £167.8 billion in 2024-25 (5.8 per cent of GDP) This is primarily due to the reductions to employee NICs announced by the previous Government with the second cut introduced in April 2024 The increase to employer NICs announced by this Government at the October 2024 Budget causes forecast NICs to rise by nearly 20 per cent to £200.6 billion in 2025-26 (6.7 per cent of GDP) NICs receipts are then expected to increase broadly in line with wages and salaries growth over the rest of the forecast to £226.2 billion in 2029-30 (6.5 per cent of GDP) The impacts of these policy changes were discussed in more detail in paragraphs 3.8-3.12 of the October 2024 EFO NICs receipts are £0.3 billion higher in 2024-25 and an average of £2.4 billion a year higher over the rest of the forecast This is due to stronger 2024-25 receipts raising the starting point for the forecast and higher earnings growth Our assessment of the impacts of the employer NICs increase announced at the October 2024 Budget has not changed materially at this event as discussed in Chapter 3 with higher forecast earnings growth increasing the amount raised by the policy by an average of just £0.2 billion a year from 2025-26 4.12 Self-assessed IT is forecast to raise £49.7 billion in 2024-25 (1.7 per cent of GDP) As 2024-25 SA IT receipts mainly relate to activity in 2023-24 this is due to growth in savings and self-employment incomes in that year combined with frozen tax thresholds These receipts are then forecast to rise to £76.2 billion in 2029-30 (2.2 per cent of GDP) SA IT receipts are £3.5 billion lower this year and an average of £2.4 billion a year lower over the remainder of the forecast The October forecast assumed that receipts would grow 25 per cent this year compared to 2023-24 due to: (i) the reduction in April 2023 of the threshold for the additional rate of income tax and the freezes in the personal allowance and higher-rate thresholds; (ii) high interest rates boosting savings income; and (iii) a return to a more usual level of dividend income after it had been depressed in 2022-23 by the unwinding of forestalling ahead of the increase to dividend rates in April 2022 Provisional analysis suggests that while self-employment and savings income grew in line with the forecast both partnership and dividend income were significantly weaker than expected this may be related to high inflation and rising interest rates in 2023-24 4.14 The shortfall in SA IT receipts in 2024-25 lowers the starting point for the forecast and so reduces receipts by a similar amount each year over the medium term. As announced in October 2024, from April 2026, carried interest income will be taxed under the income tax regime rather than as capital gains. This leads to an average £2.3 billion per year reclassification of receipts from CGT to IT from 2027-28.[42] 4.15 VAT receipts are forecast to raise £171.3 billion in 2024-25 (6.0 per cent of GDP), a 1.4 per cent increase from 2023-24.[43] This relatively low growth is due to a lower share of consumption on goods receiving the standard rate of VAT than was the case in 2023-24 Receipts are then forecast to rise to £211.1 billion by 2029-30 (6.1 per cent of GDP) This modest rise as a share of GDP over the forecast is a result of the policies in this Spring Statement and in the Autumn 2024 Budget to charge VAT on private school fees and reduce non-compliance VAT receipts broadly grow in line with nominal consumption receipts are £0.1 billion higher in 2024-25 and then lower by an average of £2.0 billion over the rest of the forecast period This is due to lower forecast nominal consumption growth over this period and a lower forecast proportion of spending on goods that pay the standard rate of VAT and gas prices crowding out standard-rated consumption 4.17 Onshore corporation tax is expected to raise £92.7 billion (3.2 per cent of GDP) in 2024-25 This increase is mainly driven by companies being subject to a full year of the higher 25 per cent rate of corporation tax It is then forecast to rise to £115.8 billion (3.3 per cent of GDP) by 2029-30 as from 2026-27 onwards profits recover from their recent weakness and grow slightly faster than GDP onshore corporation tax is expected to be £4.6 billion lower each year across the forecast We now expect that 2024-25 receipts will be £5.5 billion (5.6 per cent) below the October forecast This is due to weaker profits in 2024-25 than expected in October in part due to persistent earnings growth squeezing profits and higher-than-anticipated inflation and interest costs for small companies in 2023-24 which pay on a one-year lag (discussed further in Box 4.1) 4.19 Onshore corporation tax is expected to stabilise at around 3.3 per cent of GDP over the forecast period a significant increase from 2.2 per cent of GDP in 2019-20 prior to the pandemic onshore corporation tax receipts rose faster than could be explained by profits and policy changes implying a rising effective tax rate on profits This was likely due to the strong performance of sectors with high effective tax rates on their profits such as the financial and professional services sectors after the pandemic the reverse is true in 2023-24 where growth is driven by profits and the introduction of the 25 per cent corporation tax rate from April 2023 Around two-thirds of this weakness is from small companies The remaining one-third comes from the financial sector as our models appear to have over-estimated the increased income in the financial sector arising from higher interest rates The year-on-year growth in 2024-25 can be mostly explained by companies paying a full year of the higher 25 per cent rate of corporation tax with only a very small contribution from profits and the effective tax rate remaining stable and the energy profits levy (EPL) are expected to raise £4.2 billion (0.1 per cent of GDP) in 2024-25 This is due to the decline in oil and gas receipts as prices return to historic norms following the sharp rise in 2022-23 Receipts are then forecast to decline to £2.3 billion (0.1 per cent of GDP) in 2029-30 primarily due to the expected continued fall in oil and gas production oil and gas receipts are £0.3 billion lower this year but an average of £0.3 billion higher over the rest of the forecast These changes reflect higher oil and gas prices and increased production partially offset by upward revisions to capital expenditure (which reduce the forecast) 4.22 The increased expenditure and production forecasts mostly reverse the decreases applied at the October forecast which were on the basis of policy announcements and other uncertainties around the licensing regime and ongoing legal cases at that time a series of changes were announced to extend the EPL for another year to 2029-30 and remove the investment allowance for all expenditure except that related to decarbonisation as well as lower the rate of the decarbonisation allowance from 80 per cent to 66 per cent outturn data and external projections have indicated greater strength than anticipated for production and expenditure offering some early evidence that we over-estimated the response of expenditure and production to these changes There is a risk that some of the increased expenditure represents a potential forestalling impact in response to announced policy changes though there is uncertainty regarding the extent of this response 4.23 Fuel duty is expected to raise £24.4 billion (0.8 per cent of GDP) in 2024-25 This is primarily due to weaker diesel receipts due to falling diesel car sales Receipts are forecast to remain relatively flat next year as a result of the extension of the 5p cut and the freezing of duty rates announced at the October 2024 Budget Receipts are then forecast to increase by £2.6 billion (10.6 per cent) in 2026-27 on the assumption that the reversal of the 5p cut is implemented and duty rates are uprated with RPI Receipts are forecast to peak at £27.3 billion in 2027-28 before falling by £0.4 billion by 2029-30 reflecting the inflection point where the assumed increase in fuel duty rates is outweighed by the rising electric vehicle (EV) share 4.24 This forecast assumes that the government reverses the 5p fuel duty cut and uprates duties with RPI fuel duty rates have not been increased since 2011-12 If the duty rate were to remain unchanged at its current level throughout the forecast period it would reduce receipts by £3.8 billion between 2026-27 and 2029-30 receipts are relatively unchanged this year and an average of £0.1 billion a year lower over the rest of the forecast This is driven by a fall in the car mileage forecast in line with lower real consumption 4.26 Capital gains tax is forecast to raise £13.3 billion in 2024-25 (0.5 per cent of GDP) This is likely due to continued unwinding of high gains realised during 2020-21 and 2021-22 Receipts are forecast to increase sharply to £19.7 billion in 2025-26 as tax is paid on gains forestalled ahead of the Autumn 2024 Budget Receipts are then forecast to rise to £25.5 billion in 2029-30 (0.7 per cent of GDP) We assume that CGT receipts will rise as a share of GDP based on past trends and as wealth increases across generations as individuals accumulate financial and property assets We will keep this assumption under review given recent downwards surprises in outturn and will further assess evidence on these cohort effects receipts are £2.4 billion lower in 2024-25 and an average of £4.1 billion a year lower over the remainder of the forecast We expect the 2024-25 shortfall to taper away in future years and for CGT to return to the long-run trend described above and discussed further in Box 4.1 the shortfall is driven by updated data on the composition of liabilities as well as the reclassification of roughly £2 billion in carried interest receipts to income tax from 2027-28 onwards This more than offsets the impact of slightly higher equity prices than forecast in October 2024 which adds around £0.4 billion by the end of the forecast 4.28 Property transaction taxes are forecast to raise £15.0 billion in 2024-25 This rise reflects a recovery in the housing market as well as increased activity expected ahead of the decrease in nil-rate stamp duty (SDLT) thresholds in April 2025 Transactions are then forecast to rise steadily with receipts reaching £26.5 billion in 2029-30 receipts are £0.9 billion higher this year but unchanged on average over the rest of the forecast The planning reforms announced by the Government are expected to increase completions by an average of 40,000 per year from 2026-27 and transactions by an average of 3 per cent per year This raises SDLT receipts in 2029-30 by £1.1 billion relative to the pre-measures baseline 4.30 Inheritance tax (IHT) receipts are forecast to raise £8.4 billion in 2024-25 a 11.6 per cent increase on 2023-24 largely driven by higher asset prices in the second half of 2024 Receipts are then forecast to rise to £14.3 billion in 2029-30 with around £2.5 billion of the rise in 2029-30 due to the policies announced in October 2024 receipts are £0.1 billion higher in 2024-25 and an average of £0.5 billion a year higher over the rest of the forecast Changes are largely driven by higher in-year outturn with higher cash deposits and property prices helping to offset fewer projected deaths over the forecast 4.32 Air passenger duty (APD) receipts are expected to raise £4.2 billion in 2024-25 This is due to a continued increase in passenger numbers Receipts are forecast to increase to £6.5 billion in 2029-30 driven by increasing passenger numbers and higher duty rates Receipts are broadly unchanged relative to October 4.33 Vehicle excise duty (VED) receipts are expected to raise £8.2 billion in 2024-25 a 6.4 per cent increase from 2023-24 due to higher vehicle numbers and the increase in duty rates in line with RPI Receipts are forecast to increase to £11.1 billion in 2029-30 driven by more cars paying the Expensive Car Supplement and the extension of VED to EVs from 2025 receipts are £0.1 billion lower on average per year due to a decline in the new car sales forecast 4.34 Tobacco duty receipts are expected to raise £8.1 billion in 2024-25 a 9.5 per cent decline relative to 2023-24 as consumption continues to fall sharply in part due to the substitution from tobacco products towards vaping Receipts are forecast to remain broadly steady in cash terms over the forecast period as falling consumption offsets above-RPI duty rate increases The forecast is £0.5 billion lower each year than it was in October due to lower-than-anticipated in-year receipts being pushed through to future years 4.35 Alcohol duty receipts are expected to raise £12.4 billion in 2024-25 a 0.8 per cent decline relative to 2023-24 Receipts are then anticipated to increase to £15.7 billion by 2029-30 an average rise of 4.8 per cent each year due to assumed increases in alcohol duties and rising consumption The forecast is £0.2 billion lower each year relative to October due to lower forecast consumption growth 4.36 Emissions trading scheme (ETS) receipts are expected to raise £3.5 billion in 2024-25 a 42.4 per cent decrease compared to 2023-24 This is due to a fall in carbon prices resulting from a lower average clearing price at auction Receipts are forecast to decline to £1.7 billion in 2029-30 as the number of allowances auctioned declines receipts are an average of £0.1 billion higher due to an increase in forecast carbon prices 4.37 Electricity generator levy (EGL) receipts are expected to raise £1.0 billion this year a 16.2 per cent decrease compared to 2023-24 the EGL raises tax for an extra year compared to the October forecast – until the end of 2026 – as this is when forecast wholesale electricity spot prices now drop below the benchmark price Higher prices mean the forecast has been revised upwards by £0.4 billion in 2025-26 and £0.1 billion in 2026-27 relative to October 4.38 Receipts from environmental levies are expected to be £11.9 billion in 2024-25 and then forecast to rise to £14.8 billion in 2029-30 due to increased electricity generation in the Contracts for Difference (CfD) forecast and an increase in recent auction prices in the capacity markets forecast and an average of £0.2 billion a year lower over the rest of the forecast where higher wholesale electricity prices decrease the forecast level of subsidy which is recouped by a levy on consumer bills We have also incorporated the January announcement on the extension of subsidies for biomass electricity generation at the Drax power station which adds around £0.5 billion a year to the CfD scheme from 2027-28 Most of these schemes are fully offset in spending and so are neutral for public sector net borrowing 4.39 VAT refunds are forecast to raise £29.2 billion in 2024-25 They then grow over the forecast in line with government consumption and £1.1 billion a year lower on average over the rest of the forecast This is driven by lower-than-anticipated in-year receipts VAT refunds are offset in spending and so are neutral for borrowing 4.40 Interest and dividend receipts are forecast to raise £43.5 billion in 2024-25 a 0.7 per cent decrease from 2023-24 as Bank Rate subsides Receipts then fall next year before increasing every year thereafter to reach £46.5 billion in 2029-30 In recent years the return on interest-rate-sensitive elements such as the Government’s bank deposits and foreign exchange reserves has risen while the accrued interest on student loans has been boosted by high RPI inflation receipts are £0.4 billion higher in 2024-25 and £1.0 billion a year higher over the rest of the forecast This largely reflects a higher path for Bank Rate in every year and stronger cumulative equity price growth increasing the return on funded pensions 4.41 Council tax is forecast to raise £47.7 billion in 2024-25 councils cannot raise council tax rates by more than 5 per cent without a referendum however in 2025-26 the Government has allowed an additional six local authorities to raise rates by more than this without referendums alongside increasing the threshold for referenda for authorities with Police and Crime Commissioners and Fire and Rescue Authorities Receipts are forecast to rise to £61.5 billion by 2029-30 receipts are £0.3 billion higher on average across the forecast Pressures on local authority spending that could lead to further flexibilities being granted to councils and higher than forecast council tax receipts are discussed in paragraphs 5.37-5.38 4.42 Business rates are forecast to raise £31.8 billion in 2024-25 an 8.5 per cent increase on 2023-24 driven mainly by higher CPI inflation which was used to increase the standard ‘multiplier’ applied to a building’s rateable value A reduction in the generosity of tax reliefs boosts business rates in 2025-26 and 2026-27 hospitality and leisure (RHL) sectors is less generous in 2025-26 and is then assumed to be zero thereafter The October 2024 Budget said that the Government intends to introduce permanently lower multipliers for RHL properties paid for by a higher multiplier on properties with very high rateable values We have not included this in the forecast in the absence of policy details Business rates are then forecast to rise broadly in line with CPI inflation to £39.2 billion in 2029-30 receipts are £0.3 billion lower in 2024-25 and an average of £0.5 billion a year lower over the rest of the forecast 4.43 Gross operating surplus (GOS) is the sum of public sector depreciation and public corporations’ trading surplus It is forecast to be £79.3 billion in 2024-25 which is a 4.5 per cent increase compared to 2023-24 This is due to an increase in both depreciation and public corporations’ trading surplus GOS is forecast to rise to £94.4 billion in 2029-30 driven by growth in the stock of public sector capital which raises depreciation receipts are £1.2 billion higher this year and an average of £2.2 billion higher over the forecast This reflects upwards outturn revisions for public corporations’ trading surplus mainly driven by higher outturn in the Housing Revenue Account pushing through the forecast Public sector depreciation is offset in spending 4.44 Home Office fees are forecast to raise £5.8 billion in 2024-25 This is driven by 2024-25 being the first full year that is subject to the increase in the immigration health surcharge and a range of visa fees that took place in the second half of 2023-24 Receipts are expected to remain at £5.8 billion in 2025-26 as a result of the additional increase to visa fees announced at this Spring Statement before falling back to £5.7 billion by 2029-30 due to lower gross migration receipts are £0.9 billion higher on average over the forecast due to the impact of policy changes and the increase in outturn receipts relative to gross migration The Government has told us that all the additional revenue generated from the latest increase in visa fees will go towards departmental spending and we have therefore added an offsetting amount to our spending forecast 5.1 From a post-war peak of 53 per cent of GDP during the pandemic in 2020-21 total public spending fell as a share of the economy to 44.7 per cent in 2023-24 (Chart 5.1) Spending is forecast to decline again by 0.3 per cent of GDP in 2024-25 as falls in debt interest and other elements of annually managed expenditure (AME) more than offset growth in departmental expenditure limits (DELs) total spending is forecast to rise to 45.0 per cent of GDP due to further rises in departmental spending as a share of GDP Overall spending is then forecast to decline gradually from 2026-27 onwards as a share of GDP as a result of declining departmental spending By 2029-30 spending is still forecast to be 4.2 per cent of GDP higher than on the eve of the pandemic in 2019-20 the overall decline in total public spending of 1.1 per cent of GDP over the forecast period is the result of: 5.3 Relative to the October 2024 forecast (restated for Blue Book 2024 nominal GDP revisions),[44] spending is forecast to be 0.2 per cent of GDP higher in 2029-30 Before the impact of policy measures announced since the October 2024 forecast there was a 0.4 per cent of GDP increase to the spending forecast primarily because of higher interest rates and inflation increasing debt interest spending The direct and indirect effects of policy measures in this forecast reduce spending by 0.2 per cent of GDP in 2029-30 mainly driven by a £4.8 billion reduction in welfare spending as a result of policy This leaves spending as a share of GDP at the forecast horizon slightly higher than the restated October 2024 forecast and 1.6 per cent of GDP higher than the previous Government’s plans for public spending as set out in the Spring 2024 forecast 5.4 The spending-to-GDP ratio in 2024-25 is estimated to be 4.8 percentage points higher than the pre-pandemic level in 2019-20 it is forecast to be 4.2 per cent of GDP above this pre-pandemic level The composition of spending will also have shifted substantially over the 20-year period from 2010-11 to 2029-30 (Chart 5.2): 5.5 Chart 5.3 shows the contribution of Government policy decisions to the forecast increase in public spending of 4.2 per cent of GDP from 39.6 per cent in 2019-20 to 43.9 per cent in 2029-30: spending in cash terms has been revised up in each year of the forecast (Table 5.2): as of the February 2025 supplementary estimates and the Government’s spending assumptions for 2026-27 and beyond The latter entails two overall spending totals (one for total resource DEL and one for total capital DEL) but provides no detailed plans for how these are to be divided between each government department – these will be set in the Government’s planned 2025 Spending Review due to conclude this summer total departmental spending is an average of £3.8 billion (0.6 per cent) a year higher over the forecast period Chart 5.4 and Table 5.3 show the composition of these changes across RDEL and CDEL and their impacts on the path of real spending over the forecast: 5.9 The following sections assess the path of departmental spending in the years in which department allocations are set (2024-25 and 2025-26) This includes allocation across departments and economic categories pressures and risks on these allocations and the Treasury’s central reserve and our judgements on the level of likely over or underspending against the limits set by the Treasury 5.10 RDEL in 2024-25 is now estimated to be £450.7 billion, £2.6 billion lower than in the October forecast, following a small decrease of £0.9 billion at February supplementary estimates,[49] and a £1.8 billion increase to the underspend assumption there has been £1.5 billion in additional claims on the reserve since October (of which around four-fifths relate to Department for Health and Social Care (DHSC) and the Ministry of Defence (MoD)) but these were more than accommodated by allocations of the Treasury’s central reserve and by the ‘surrenders’ (or remittances) of underspends by departments (including from the Home Office MoD and the Department for Business and Trade (DBT)) back to the Treasury The three main in-year spending pressures we discussed in the October 2024 Economic and fiscal outlook (EFO) have been accommodated within the RDEL envelope 5.11 Looking at the pace of budget execution by the ninth month of the current financial year in total departments had spent £337.8 billion which is 74 per cent of the full-year RDEL control total This is very close to the long-run ninth-month average of 75 per cent Reflecting this normal pattern of spending in the in-year position and the accommodation of pressures within the DEL envelope shown above we have assumed a small underspend of £5.7 billion against the Treasury’s final 2024-25 RDEL limit (up from our £3.9 billion assumption in October) equivalent to 1.2 per cent of the current forecast for in-year RDEL EPR revenues had previously been classified as a fee within spending but are now classified as a tax receipt This reclassification increases DEL spending by £1.5 billion in 2025-26 and an average of £1.7 billion a year between 2026-27 and 2029-30 On the Treasury’s control total definition of RDEL the specific 2025-26 departmental allocations are now slightly higher than in October 2024 5.15 In light of the modest changes to departmental allocations and pressures the Treasury has agreed to fund from the reserve we have maintained our assumption of a small underspend of 1.3 per cent against the Treasury’s final 2025-26 RDEL limit 5.17 Looking at the pace of budget execution departments had spent £68.7 billion (64.7 per cent) of the full-year PSGI in CDEL control total This is higher than the average PSGI in CDEL spend by the ninth month in the post-pandemic years which is 61.9 per cent suggesting that departments will underspend by less this year than the recent past 5.18 Given the stronger trajectory of spending over the year to date and that CDEL reserves of £2.8 billion were not sufficient to cover the large claim by the MoD we have reduced our underspend assumption compared to October We now assume an underspend of £3.3 billion (3.1 per cent) against the Treasury’s final 2024-25 CDEL limit compared to the £6.7 billion (6.4 per cent) assumed in the October forecast 5.19 Compared to the October forecast, the main differences in departmental allocations reflect the changes to 2024-25 described above and the allocation of £1.8 billion of the CDEL reserve in 2025-26 to the MoD.[54] 5.20 The CDEL reserve for 2025-26 is now £0.4 billion £2.3 billion lower than at the October forecast reflecting the allocation of £1.8 billion from the CDEL reserve to MoD and the net effect of budget exchanges where departments carry forward unspent funds by exchanging them with the reserve (of £0.5 billion) that is risks around which the Treasury has some conditional agreements with departments broadly unchanged compared to the time of the October forecast due to a funding agreement for the £1.8 billion of new MoD risks 5.21 CDEL is set to increase next year by a substantial 5.4 per cent real growth rate Evidence from previous years when there have been significant increases in CDEL suggests departments will underspend against plans We have therefore maintained our underspend assumption unchanged at 8.0 per cent from the October forecast the Government has not allocated DEL budgets to departments RDEL allocations for the three years from 2026-27 to 2028-29 and CDEL allocations for the four years from 2026-27 to 2029-30 will be set at the conclusion of the Spending Review in June 2025 The RDEL envelope will remain unallocated for 2029-30 until the next Spending Review exercise 5.23 Total departmental spending is currently set to rise from £616.0 billion in 2026-27 to £670.6 billion by 2029-30 This has been increased by an average £4.2 billion a year since the October forecast Capital spending has been increased by an average £3.1 billion RDEL spending has been raised by £2.0 billion a year in the first three years but reduced by £1.9 billion in the final year (Table 5.6) 5.24 The policy announcement to finance the increase in defence spending to 2.5 per cent of GDP by 2027-28 through a reduction in ODA to 0.3 per cent of GNI by 2027-28 improves the current budget position the total reduction in ODA spending of £6.8 billion is offset by the total £6.9 billion increase in defence spending almost all the increase in defence spending is in the form of higher capital (92 per cent in 2029-30) whereas the reductions in ODA spending are spread more evenly across both capital and resource spending (47 per cent current and 53 per cent capital in 2029-30) while the change is near-neutral for total spending and public sector net borrowing it leads to an improvement in the current budget of £2.6 billion in 2029-30 5.25 These changes imply a 20.1 per cent nominal increase in defence spending and a 33.1 per cent reduction in the total ODA budget in three years There are risks to the delivery of these substantial and rapid changes 35 per cent of the budget was spent via multilateral institutions to which commitments typically span multiple years though some of these are only planned until the end of 2025-26 including £3.5 billion of spending to reach the International Climate Finance target The previous Government was able to reduce ODA from 0.7 to 0.5 per cent of GNI between 2020 and 2021 many capital defence projects are complex and long term although the MoD delivered an 85 per cent nominal increase in its CDEL budget between 2019-20 and 2023-24 5.26 There is a further risk from the Government’s intention to reduce ODA spending on support for asylum seekers in the UK (“in-donor refugee costs”) by clearing the asylum backlog which has risen rapidly in nominal terms and as a share of UK ODA (Chart 5.9) Spending on support for asylum seekers is partly demand-driven and outside the control of government and the savings from reducing the backlog may be partly offset in higher costs to local authorities 5.27 The Government’s intention to raise defence spending to 2.5 per cent of GDP by 2027-28 will bring it back in line with levels last seen in 1995-96 It would still be well below the 3.2 per cent level at the end of the Cold War and the over 4 per cent level during the 1980s 5.28 As in previous EFOs, for the period beyond which departmental budgets have been fixed, which is currently the years after 2025-26, we consider what a set of input targets and commitments in some areas of spending imply for growth in spending in areas not covered by commitments – often called ‘unprotected’ spending.[56] In terms of day-to-day departmental spending (RDEL) 5.29 Within the assumed envelope for total RDEL spending provided by the Treasury these assumptions would leave other ‘unprotected’ RDEL spending (accounting for just under a third of day-to-day departmental spending) growing by 1.6 per cent a year in real terms from 2023-24 But unprotected RDEL spending would fall by 0.8 per cent a year in real terms from 2026-27 Spending would have to be £5.3 billion higher in 2029-30 for unprotected spending not to fall in real terms from 2026-27 The reduction in ODA spending reduces the implied pressure on unprotected RDEL to below the average 1.1 per cent fall in unprotected spending between 2025-26 and 2029-30 implied in our October 2024 forecast It is also below the 2.3 per cent fall in unprotected RDEL spending between 2025-26 and 2028-29 implied in our March 2024 forecast based on the plans set at that time by the previous Government This would be above the 0.6 per cent growth we forecast for private sector employment The share of CDEL used to build fixed assets increases slightly this year after which we assume the share of CDEL in each category remains constant over time (Table 5.8) 5.31 Total welfare spending in the forecast refers to AME spending on social security and tax credits Around half is subject to the Government’s ‘welfare cap’ which excludes the state pension and those payments most sensitive to the economic cycle (we discuss performance against the cap in Chapter 7) The welfare spending forecasts are based on the determinants in the latest economy forecast – principally population and inflation – and informed by the latest outturn data and Department for Work and Pensions models 5.32 Welfare spending is forecast to rise this year by £16.7 billion (5.6 per cent) driven by the uprating of most benefits with CPI inflation to £313.0 billion or 10.9 per cent of GDP (Table 5.9) It is then forecast to rise in nominal terms by an average of £12.1 billion (3.6 per cent) a year over the rest of the forecast period welfare spending now falls slightly over the forecast to reach 10.8 per cent GDP in 2029-30 though this would still be 0.6 per cent of GDP higher than before the pandemic 5.33 The main drivers of this increase over the forecast are higher pensioner spending due to the ageing population and the triple lock and rising caseloads for health and disability benefits Spending on these components increases total welfare spending between 2023-24 and 2029-30 by 0.5 per cent of GDP offsetting the equal and opposite fall in all other welfare spending (Chart 5.12) The rise in pensioner spending is dampened by the increase in the state pension age from 66 to 67 between 2026 and 2028 which reduces spending on pensioner benefits by £10.4 billion (0.3 per cent of GDP) by 2029-30 Health and disability spending rises by 0.4 per cent of GDP even after the impact of the welfare measures included in this Spring Statement primarily on non-health-related working-age benefits falls by 0.5 per cent GDP over this period due to GDP growth outstripping CPI uprating and caseloads forecast to be largely stable or falling 5.34 Relative to the October 2024 forecast welfare spending is lower across the forecast by an average of £1.5 billion Table 5.10 shows that this revision is driven by: 5.35 Forecast growth in working-age health and disability spending is lower than in the October forecast driven nearly entirely by the Government’s package of welfare reforms reducing spending from 2026-27 onwards we expected working-age health and disability spending to increase by £20.0 billion between 2024-25 and 2029-30 compared to £15.4 billion in this forecast This spending is now forecast to be £5.3 billion lower in 2029-30 than in October (Chart 5.13) nominal annual growth of working-age health and disability spending across the forecast (averaging 4.9 per cent a year from 2024-25) still exceeds pensioner spending growth (3.8 per cent a year) and significantly outstrips non-pensioner non-health-related welfare spending growth (1.6 per cent a year) 5.36 Roughly two-thirds of the downward revision to health and disability spending in 2029-30 is explained by lower disability spending with the remainder mostly explained by lower incapacity spending Full details on the policy measures driving these changes is provided in Chapter 3 5.37 Locally financed current expenditure is forecast to rise from £66.5 billion (2.3 per cent of GDP) in 2024-25 to £81.1 billion (2.3 per cent of GDP) in 2029-30, as local sources of income grow steadily by an average of £2.9 billion (4.1 per cent) a year.[59] Compared with the October 2024 forecast locally financed current expenditure is higher in the near term by £0.9 billion in 2024-25 and £0.7 billion in 2025-26 then broadly flat over the rest of the forecast (Table 5.11): rising to an expected 29 authorities and a cost of £1.3 billion per year in 2025-26 (Chart 5.14) The Government has not yet set out how local authority spending pressures will be managed after 2025-26 in the next Spending Review period 5.40 Debt interest spending as a share of GDP is forecast to fall from a post-war high of 4.3 per cent of GDP in 2022-23 to 3.7 per cent of GDP in 2024-25 and to 3.6 per cent of GDP in 2026-27 before rising slightly in the final three years of the forecast to 3.8 per cent of GDP in 2029-30 debt interest spending is an average of 0.2 percentage points higher as a share of GDP and 0.4 percentage points higher as a share of total revenue This primarily reflects higher gilt rates and Bank Rate expectations across the forecast period as well as stronger RPI inflation in the near term Debt interest spending as a share of GDP is now forecast to be broadly flat over the forecast period with a slight rise of 0.1 per cent of GDP in the final year whereas in the restated October forecast it fell by 0.1 per cent of GDP between 2024-25 and 2029-30 Spending on debt interest is around twice as high as the 10 years preceding the pandemic debt interest spending is forecast to fall from £106.7 billion in 2023-24 to £105.2 billion this year due to lower RPI inflation which reduces the cost of index-linked gilts Debt interest spending then increases in every year of the forecast to reach £131.6 billion by 2029-30 as the stock of debt rises the forecast is higher by an average of £5.9 billion a year and by £9.4 billion in 2029-30 These changes are primarily driven by increases in market expectations for the path of interest rates since October: 5.42 The main changes to other AME spending since the October forecast include: 6.1 This chapter details how changes in our pre-measures forecast and policies announced since the Autumn 2024 Budget affect summary measures of the public finances 6.3 Chart 6.2 breaks down the 2.6 percentage point forecast decrease in borrowing as a share of GDP between 2024-25 and 2029-30 2.0 percentage points relate to higher receipts with a combined 1.4 percentage points due to a rise in revenues from income tax and National Insurance contributions (NICs) This is largely driven by the Autumn 2024 Budget increase in employer NICs and by stronger nominal earnings growth combined until 2027-28 with the frozen personal tax thresholds that were announced by the previous Government most notably capital gains tax and stamp duty combine to increase receipts by a further 0.6 per cent of GDP Lower spending explains the remaining 0.6 percentage points of the fall in borrowing This reflects a 0.1 percentage point fall in welfare spending and a projected 0.8 percentage point decline in a number of smaller items of annually managed expenditure (AME) This is only partly offset by a 0.1 per cent of GDP rise in debt interest and a 0.1 per cent of GDP increase in departmental spending borrowing in cash terms is higher by £9.8 billion in 2024-25 and £12.1 billion in 2025-26 and then by progressively smaller amounts until 2029-30 when it is forecast to be £3.5 billion higher (Table 6.1 and Chart 6.3) successive governments have increased the state pension age (SPA) the SPA has risen from 60 to 65 for women between April 2010 and November 2018 and then from 65 to 66 for both men and women between December 2018 and October 2020 the SPA will increase again from 66 to 67 for men and women between April 2026 and March 2028 as announced in the Pensions Act 2014 and confirmed by the Government in March 2023 This has a significant fiscal impact in the current forecast – we estimate its net impact is to reduce borrowing by £10.5 billion in 2029-30 Increasing the SPA affects the public finances through three main channels The largest is the direct reduction in the number of people eligible for the state pension in each year which we estimate saves £10.4 billion in 2029-30 relative to the state pension age remaining at 66 The majority (£10.2 billion) of these savings come from 820,000 fewer 66 year-olds receiving the state pension with a further saving (£0.2 billion) from 40,000 fewer 66 year-olds receiving pension credit and winter fuel payment This overall saving equates to 5.7 per cent of total pensioner spending in 2029-30 These savings are partially offset by a rise in the number of people who remain eligible for working-age benefits as a result There are currently around 60,000 65 year-olds (excluding mixed age couples)a in receipt of universal credit (UC) equivalent to 7.4 per cent of the 65-year-old population If the share of 66 year-olds in receipt of UC in 2029-30 remains at this level and assuming average awards for 66 year-olds will be similar to those for 65 year-olds,b this would cost £0.7 billion in 2029-30.c The rise in the SPA also creates incentives to join or remain in employment The average employment rate for those in their mid-60s and above is at 11.9 per cent and an average increase in earnings of £52 per week across all 65 year-olds.f If the rise in the SPA to 67 results in a similar rise in employment and earnings this would boost tax revenues by around £0.9 billion by 2029-30 we estimate these channels result in an overall net fiscal saving of £10.5 billion from the SPA rising to 67 relative to it remaining at 66 We will return to the impacts of the rise in the SPA as part of a broader consideration of pensions-related risks in our 2025 Fiscal risks and sustainability report a) Where one adult in a couple is over state pension age average awards for 65 year-olds on UC are 14 per cent lower than the rest of the caseload only partially offset by a higher average entitlement for the health element c) We do not consider impacts on disability spending as working-age personal independence payment (PIP) and disability living allowance (DLA) recipients will continue to receive PIP and DLA once they reach state pension age and we expect higher new claims of PIP due to the SPA rise to be roughly offset by fewer new claims of attendance allowance The effect of increasing the state pension age to 66 on labour market activity This increase in employment and earnings is an average across all 65-year-olds the Government’s fiscal mandate is to balance the current budget by 2029-30 Defined as the difference between total current spending (i.e day-to-day spending excluding capital investment) and total current revenue the current deficit is expected to fall from £61.1 billion (2.2 per cent of GDP) in 2023-24 to £60.7 billion (2.1 per cent of GDP) in 2024-25 The current balance continues to improve over the forecast period to reach a surplus of £9.9 billion (0.3 per cent of GDP) in 2029-30 unchanged from the October restated forecast the current budget deficit is expected to be £5.2 billion higher in 2024-25 and £10.0 billion higher in 2025-26 but then unchanged by 2029-30 6.7 Other deficit measures also provide relevant information on the state of the public finances is a measure of the extent to which discretionary spending is covered by revenues and is sometimes referred to as a gauge of ‘fiscal effort’ All measures of the deficit can be presented in cyclically adjusted terms correcting for an estimate of the position in the economic cycle which provides a rough indication of the underlying or structural deficit: 6.8 Changes in public sector net debt and wider balance sheet aggregates including public sector net financial liabilities are calculated by combining changes in borrowing with changes in financial transactions and any valuation effects Financial transactions capture the effects of public sector net lending and interventions which affect the Bank of England’s balance sheet They also convert the accrued measures of tax and spending which underpin our forecast for borrowing into the cash flows relevant to debt Valuation effects capture changes in the value of the assets or liabilities held by the public sector which count toward the measure of net debt public sector net debt increases in each year of the forecast The top panel of Table 6.2 breaks down the contribution of public sector net borrowing policy measures and valuation effects to the year-on-year change in PSND debt rises by £9.0 billion less in 2024-25 but by an average of £10.7 billion more in each subsequent year Higher borrowing across the forecast increases debt in each year The other main change is due to a revised profile for TFS repayments Higher-than-expected repayments in 2024-25 are assumed to persist in 2025-26 thereby reducing expected repayments in 2026-27 when the majority of outstanding loans are due to be repaid In 2024-25 valuation changes also push down on debt relative to October which reflects an increase in the value of the UK’s holdings of foreign denominated assets 6.12 Between 2012 and the third quarter of 2022 the APF returned £123.9 billion of profits to the Treasury reflecting the gap between gilt yield earned on the gilts held within the APF and the Bank Rate paid out on the reserves issued to the private sector (Chart 6.6) Since then the consistently higher Bank Rate has led to large interest losses These losses were £18.5 billion in 2024-25 but are forecast to decline sharply to £3.3 billion in 2029-30 based on market expectations of a falling Bank Rate and as the stock of gilts held by the APF declines (Table 6.4) 6.13 The APF also makes valuation losses when gilts are sold or redeemed for prices below those at which the gilts were originally bought These losses vary greatly from year to year depending on the composition of gilts run-off Valuation losses are expected to be £12.7 billion in 2025-26 somewhat lower than the range of £17.6 billion to £22.5 billion seen in other years of the forecast (Table 6.4) the Government’s target measure for its fiscal mandate APF valuation losses on sales or redemptions do not affect the current budget but do increase PSND and PSNFL This means that selling APF-held gilts decreases the negative impact from the APF on the current budget over time A faster pace of sales would therefore improve the current budget compared to a slower pace of sales 6.16 This is not a comprehensive assessment of the overall fiscal impact of the Quantitative Easing (QE) programme and financial markets at various points of stress over the past 15 years These wider economic and fiscal benefits would need to be considered in any comprehensive assessment of the impact of QE 6.17 The central government net cash requirement (CGNCR) forms the basis of the Debt Management Office’s financing remit It is the primary driver of the net issuance of gilts the government’s principal source of financing Table 6.5 shows the relationship between the CGNCR and PSNB financial transactions are added to borrowing to get the cash requirement of the whole public sector (PSNCR) with the path explained in more detail in paragraph 6.9 above The cash requirements for non-central government are then removed with the large cash surplus in early years driven by repayments of TFS loans to the Bank of England this is adjusted to account for net cash movements within the public sector to get to the CGNCR excluding Network Rail which is the measure that feeds directly into the Government’s gilt issuance plans 6.18 The CGNCR is forecast to peak at £172.6 billion this year largely due to the spike in borrowing This is more than double the £45.5 billion average in the three years prior to the pandemic but is well below the pandemic peak of £334.5 billion in 2020-21 the CGNCR is forecast to decline in line with borrowing across the forecast to £109.2 billion in 2029-30 The CGNCR is on average £40.8 billion higher than PSNB largely reflecting sales and redemptions losses on the APF (£18.4 billion on average) and net outlays on student loans (£10.5 billion) 6.19 Gross gilt issuance (the total value of gilts issued) is equal to the CGNCR plus redemptions of existing gilts and purchases (buying back of gilts by the government) minus financing by other sources such as Treasury bills and NS&I gross gilt issuance averages 8.6 per cent of GDP compared to the 1999-2000 to 2023-24 average of 6.9 per cent of GDP that is gross issuance minus redemptions and purchases Gross and net issuance are an average of 0.4 and 0.3 percentage points higher than the restated October forecast This is largely due to the higher borrowing over the forecast period increasing the financing requirement the cash requirement remains elevated over the medium term Alongside the unwinding of APF gilt holdings by the Bank of England this means that the private sector has to absorb historically high volumes of debt for a sustained period The forecast for the change in private sector holdings of gilts peaks this year at 8.7 per cent of GDP and averages 6.2 per cent of GDP over the forecast period compared to 2.8 per cent of GDP between 1999-2000 and 2023-24 The UK government meets the bulk of its financing needs through issuing gilts across a variety of maturities the fiscal position has become increasingly sensitive to movements in interest rates The stock of public debt has risen sharply from 28.3 per cent of GDP at the start of the century to 95.5 per cent in 2023-24 and is forecast to rise to 96.1 per cent in 2029-30 This necessitates substantial volumes of debt redemptions each year as existing gilts mature and require refinancing at the current interest rate on gilts the increased proportion of short-term gilts in the Government’s overall debt portfolio means that a larger fraction of the total debt is subject to more frequent refinancing The share of either short or ultra-short gilts issued has risen from 29 per cent in the 10 years prior to the pandemic to 34 per cent in the three years following the pandemic reducing the share of longer-maturity debt (Chart B) This has shifted the average maturity of the stock of debt from 16 years in 2017-18 to less than 15 years in 2023-24 increasing the sensitivity of debt interest costs to changes in short-term interest rates Shorter-maturity gilts adjust more quickly to Bank Rate relative to longer-maturity gilts and so as the average maturity of the stock of debt falls A similar shift has been seen in a number of advanced economies this shift was present in 19 of 38 OECD members including Canada where a large increase in short-term debt issuance has come alongside the need to finance sustained high deficits.a In 14 of the 38 countries short-term borrowing fell while it remained stable in the remaining 5 countries Demand for short- versus long-maturity gilts can reflect investor sentiment regarding the economy and fiscal conditions A shift towards shorter issuance may reflect changes to: All of these factors are likely to have contributed in the period during and since the pandemic to the greater demand for shorter-issuance debt relative to longer-issuance debt observed by the Debt Management Office.b One implication of switching to shorter maturity debt is that more gross issuance will be required in each year increasing government’s exposure to changes in interest rates Any rise in debt interest could outweigh the potential benefits of a slightly lower average funding cost from skewing issuance to shorter dated gilts We plan to look in more depth at longer-term trends that could affect the demand for gilts in our 2025 Fiscal risks and sustainability report Global Debt Report 2024: Bond Markets in a High Debt Environment 6.21 Public sector net debt is forecast to fall from 95.9 per cent of GDP in 2024-25 to 95.1 per cent of GDP next year before rising back to 96.1 per cent in 2029-30 (Chart 6.8) net debt is 0.8 percentage points lower this year but is higher by 0.6 percentage points by the final year of the forecast which largely reflects higher borrowing compared to October net debt was falling over the forecast period 6.23 Public sector net financial liabilities (PSNFL) is one of the Government’s supplementary fiscal targets It is a more comprehensive measure of the public balance sheet than PSND and includes non-debt liabilities such as funded pensions monetary gold and special drawing right (SDR) liabilities plus additional illiquid assets such as loans (most notably student loans) and equity holdings (including the assets of pension schemes) The additional assets recorded within PSNFL mean that it is on average £417.4 billion (12.9 per cent of GDP) lower than PSND (Table 6.6) For full details on the composition and measurement of PSNFL see Annex B of the October 2024 Economic and fiscal outlook PSNFL increases by £125.8 billion in 2024-25 and £121.6 billion in 2025-26 and by an average of £98.3 billion over the remainder of the forecast The year-on-year changes in PSNFL largely reflect changes in PSNB PSNFL rises steadily from 81.9 per cent of GDP in 2024-25 to a peak of 83.5 per cent of GDP in 2026-27 before then falling to 82.7 per cent of GDP in 2029-30 PSNFL is lower by 0.2 per cent of GDP in 2024-25 but higher by an average of 0.7 per cent of GDP a year from 2025-26 onwards This is largely driven by higher cash liabilities in each year from 2025-26 onwards while the contribution from nominal GDP turns negative by 2028-29 (as the level of nominal GDP rises slightly above that in our October forecast) and slightly offsets the cash revisions which largely offset the 0.8 per cent of GDP rise in PSNFL seen over this period inverted PSNW is 0.6 per cent of GDP higher in 2024-25 This reflects a downward revision to the 2023-24 outturn for NFAs combined with slower growth in their value over the remainder of the forecast and faster growth in unfunded pension liabilities all four measures of the balance sheet remain at historically high levels within the forecast period (Chart 6.10) and are forecast to be higher in 2029-30 than in 2024-25 All of the measures are also now expected to be higher as a share of GDP at the forecast horizon than was the case in October 7.2 The Charter for Budget Responsibility requires the OBR to judge whether the Government has a greater than 50 per cent chance of meeting its fiscal targets under current policy The fiscal mandate in the current Charter is: 7.3 There are also two supplementary targets in the current Charter: 7.4 The Charter further states that the Treasury will consider a wide range of indicators in its management of fiscal policy the fiscal mandate and supplementary targets are on course to be met 7.6 Based solely on underlying forecast changes and before taking account of the policy measures announced at this forecast the current budget target would have been missed by a margin of £4.1 billion while the PSNFL target would have been met by a reduced margin of £4.9 billion restore the headroom against the current budget and the PSNFL target so that both targets are met by margins equal or similar to those in the October forecast 7.7 The headroom against the fiscal mandate is the same as in the October 2024 forecast and the joint third lowest of 29 forecasts since the OBR was established (Chart 7.2) It is around one-third of the average headroom Chancellors have set aside across this period and only 11 per cent of the average five-year-ahead forecast error for the current budget 7.8 Compared to the October 2024 forecast, pre-measures borrowing was revised up by £13.1 billion in 2029-30. Excluding summer 2020, this degree of variance is broadly in line with the average absolute revisions to final year pre-measures borrowing of £14.4 billion since the OBR was established, and less than the £19.4 billion variance over the past ten forecasts.[72] Within this there have been both large upward revisions for example of £38.7 billion in November 2022 and large downward revisions such as £14.4 billion in March 2024 pre-measures debt interest spending was higher by an average of £6.0 billion across the five-year forecast period and £10.1 billion in the final year of the forecast more than offsetting the headroom against the fiscal mandate the Chancellor had in October the pandemic and energy crisis led to debt actually rising significantly governments have instead set fiscal plans that allow debt to rise across the forecast before aiming to stabilise it in the final years at a higher level Reflecting changes in the economy and policy choices the level at which government plans would have stabilised debt has increased at successive forecasts If the economy were to be hit by further shocks in the future this risks debt again ratcheting up significantly and from a higher level than in the past based on stochastic simulations and historic errors allow us to assess the probability of the Government meeting its current budget and PSNFL fiscal targets based on previous shocks and forecast errors Chart 7.4 shows the probability distribution around the forecast for the current budget and PSNFL based on currently stated government policy as headrooms have narrowed against different fiscal mandates this probability has only been as high as 58 per cent in March 2022 and has averaged 54 per cent (March 2025 forecast inclusive) This demonstrates that a significant increase in headroom would be needed to materially increase the probability that a fiscal mandate will be met given the inherent uncertainty in any economic and fiscal forecast 7.14 The welfare cap is a limit that the Government aims to spend on certain social security benefits and tax credits in the final year of a given Parliament the welfare cap has been revised upwards frequently to account for inflation and changes in welfare demand such as in October 2021 following the pandemic 7.15 At the October 2024 forecast the Government set a new welfare cap in 2029-30 of £194.5 billion and a margin for the cap that rises by 0.5 percentage points a year in the first two years of the forecast followed by a further 1 percentage point a year increase thereafter This was the largest since its introduction in 2014 Spending within the welfare cap in 2029-30 has fallen by £3.8 billion at this forecast due mainly to the Government’s welfare reforms the welfare cap is on course to be met by £13.5 billion 7.16 Alongside the formal assessment of the proposed fiscal targets we consider broader balance sheet and debt affordability metrics as indicators of fiscal sustainability Table 7.3 presents a dashboard of balance sheet and debt affordability metrics that shows: first their levels and how these compare with the medians from 1967-68 to 2006-07 (the four decades preceding the financial crisis) and from 2007-08 to 2018-19; and second whether they are improving or deteriorating in each year of the forecast 7.17 The OBR is required to assess whether the Government has a better-than-even chance of meeting its fiscal targets which we do by producing a median forecast relative to which the outturn is equally likely to be higher or lower than predicted based on current policies We use several analytical tools to illustrate the risks around our central forecast including: large shocks and their aftermath have often resulted in significant revisions to the economic and fiscal forecasts from one fiscal event to the next We therefore continue to emphasise the uncertainties around the forecast in the light of rapidly changing economic conditions and the possibility that any of our key judgements could prove significantly too optimistic or pessimistic Specific sources of risks to our economy forecast that we highlight in the sensitivity and scenario analysis in this Economic and fiscal outlook (EFO) include: several fiscal and policy-related risks to this forecast: 7.20 Sensitivity analysis estimates what would need to happen to key forecast parameters and judgements to reduce the headroom against different targets to zero (a ‘test to failure’ or ‘reverse stress test’) We assess the sensitivity of the change in the current budget to changes in growth gilt yields on government debt issued over the forecast 7.21 We use fiscal ready-reckoners to calibrate several possible adverse surprises relative to our central forecast that would be sufficient to push the current budget into deficit in 2029-30.[80] The £9.9 billion current budget surplus in our central forecast could fall to zero if: in this EFO we have assessed the economic and fiscal implications of alternative scenarios for productivity and for global trade policy we describe the implications for the economy forecast of these scenarios In this section we assess the fiscal implications we consider higher and lower trend productivity assumptions around the judgement in the central forecast that trend productivity growth averages 1.0 per cent over the forecast and reaches 1.3 per cent in 2029-30 trend productivity growth remains at 0.3 per cent per year throughout the forecast and in the higher productivity scenario it averages 1.2 per cent a year from next year 7.24 The fiscal implications of the lower productivity scenario which leaves the level of nominal GDP and average earnings 3.2 per cent lower in 2029-30 than in the central forecast in the higher productivity scenario where the level of nominal GDP and average earnings are 1.3 per cent higher in 2029-30: 7.26 In Box 2.2 we explore the economic implications of three separate trade scenarios: the first where the United States (US) implements additional 20 percentage point tariffs on Canada Mexico and China with each country retaliating with reciprocal tariffs; a second where the UK and the rest of the world also have these tariffs levied on them by the US unilaterally and; a third scenario where the UK and the rest of the world additionally retaliate in kind to tariffs levied on them by the US 7.27 In the first scenario, involving additional tariffs between the US, China, Canada and Mexico, there is a small short-term rise in inflation and unemployment and the level of nominal GDP falls to a trough of 0.2 per cent of GDP below our central forecast in 2026-27 and is 0.1 per cent of GDP lower in the final year. The fiscal implications are that:[82] where the US additionally levies higher tariffs on the rest of the world the level of nominal GDP falls to a trough of 0.6 per cent of GDP below the central forecast in 2026-27 and is 0.4 per cent of GDP lower in the final year The short-term impacts on inflation and unemployment are around double the impact in the first scenario with CPI and RPI 0.3 percentage points higher than our central forecast in 2025-26 the remaining US trading partners retaliate the nominal GDP level falls to a trough of 1.1 per cent of GDP below the central forecast in 2027-28 and is 1.0 per cent of GDP lower in the final year CPI and RPI inflation are 0.6 percentage points higher than the central forecast in 2025-26 and there is a peak increase in the unemployment rate of 0.3 percentage points in 2026-27 A.1 This annex contains summary tables providing a detailed breakdown of the economy and fiscal forecasts described in this Economic and fiscal outlook We also include changes since our October 2024 Economic and fiscal outlook (2) Due to the change in the ONS base year, the levels are not directly comparable to our October forecast. Where the series are not directly comparable, all levels comparisons in this chapter are made by indexing both series to the final quarter of 2019 (for quarterly series) or to 2019 (for annual series). (3) We hold the effective exchange rate constant in nominal terms across the forecast. (4) In future work, we intend to review our fiscal multipliers, including by assessing the extent to which the profile of growth over 2024 and 2025 can be attributed to the changes in the fiscal stance and to policy decisions set out in recent Budgets. (5) Labour supply is a function of the size of the population, the proportion of the population willing and able to work (the participation rate), the sustainable share of participants in the labour market that are able to find work (one minus the equilibrium unemployment rate), and the average number of hours those in employment can sustainably work. (6) The reweighted LFS estimates that were published in December 2024 were not able to include the latest revisions to migration data which were published in November 2024. (7) ONS, National population projections, migration assumptions: 2022-based, January 2025. (10) Our measure of earnings growth is derived from the ONS National Accounts measure of wages and salaries divided by LFS employees. It is conceptually similar to the ONS average weekly earnings whole-economy total pay. While there can be short-term divergences between these measures, over the longer term they tend to reflect similar trends. (11) We present RHDI on a fiscal year basis, rather than using calendar years, to reflect the timing of key policy drivers. (12) See Box 2.4 of our March 2024 Economic and fiscal outlook. (13) Bank of England, Monetary Policy Report, February 2025. (14) This includes our March 2017 Economic and fiscal outlook, when a negligible forecast deterioration was met by a negligible fiscal tightening, and March 2021, when the policy package included medium-term tax rises to bolster the public finances in the aftermath of the pandemic. (15) DWP, Pathways to Work: Reforming Benefits and Support to Get Britain Working Green Paper, March 2025. (16) As in Table 3.1, the figures in this paragraph include the consequences of decisions on the block grant adjustment (BGA). The figures for individual measures that follow below do not. The costings for measures affecting disability benefits are on an England and Wales basis, and the costings for incapacity benefits are on a Great Britain basis. (18) The standard allowance is paid at four different rates depending on whether families are single or couples and whether adults are under 25 or not. For working families it is tapered away as earnings rise, along with any other elements. (19) This static cost includes around 30,000 working families becoming newly eligible and taking up UC (or those already within the UC system who move from having an award of zero to a small positive award) due to UC awards tapering off at a higher level of earnings. (22) We assume that the behavioural response from the standard and enhanced rate of the daily living component is proportional to the size of their respective static impacts. (23) As discussed in Box 3.1, our economy forecast reflects the share of changes in spending that is spent domestically. We have assumed that 85 per cent of the change in defence spending will be spent domestically, while only 5 per cent of the change in ODA spending would have been. (25) MHCLG, National Planning Policy Framework, December 2024. (27) This captures the effect of the additional residential investment and transfer costs associated with housebuilding on excess demand. The part of the increased housebuilding which is met by an increase in the supply capacity of the economy is described in paragraph 3.41 and shown in the green bars in chart 3.5. (32) Canada and Mexico have not yet ratified the UK’s accession to the partnership, meaning that the UK will not be able to trade with these countries under these rules until they do ratify the UK’s accession. We therefore have not yet included any impacts relating to Canada and Mexico in our forecast but continue to treat these as an upside risk. (33) Department for Business and Trade, Impact assessment of the UK’s accession to the CPTPP, 2024. (34) See our online Policy costings uncertainty ratings database for a measure-by-measure breakdown of uncertainty ratings for all policy costings from this event. (35) We also implement the ONS ruling that the new Bank of England levy is a tax. (36) See Van Geest, L., External Review of the Office for Budget Responsibility, February 2025. (37) See Brightmine, Pay trends 2025 March report, March 2025. (38) This is the case in the Bank of England’s Agents’ pay survey and their Decision Maker Panel survey (see Box D in Bank of England, Monetary Policy Report, February 2025), and in the CIPD’s survey (see Chartered Institute of Personnel and Development, Labour Market Outlook Winter 2024-25, February 2025). (40) The updated Temporary Repatriation Facility (TRF) provides a three-year window for some formerly non-domiciled taxpayers to bring stockpiled offshore income and gains to the UK at a discounted tax rate. This will temporarily boost income tax receipts from 2026-27 to 2028-29. (41) In-year estimates for 2024-25 are based on ONS outturn data for April 2024 to January 2025. We incorporated some administrative cash receipts data for February on self-assessment for the days after the January 31 deadline and mid-month corporation tax. (42) This was costed on a net basis in the autumn for SA as a whole (see paragraphs 3.14-3.19 of the October 2024 EFO), however the movement of receipts between CGT and IT was not included in the forecast, hence the difference at this event. (43) This forecast includes the downward adjustment to historic VAT receipts included in the ONS’s March Public Sector Finances (PSF) publication arising from improvements to HMRC’s methodology for identifying VAT payments. This change has decreased 2024-25 receipts to February by £0.7 billion, 2023-24 by £0.5 billion, and 2022-23 receipts by £1.7 billion. (45) This £4.8 billion includes consequences of decisions for the Scottish block grant adjustment. As block grant adjustments are not included in our welfare AME forecast, these consequences are not included in our presentation of policy impacts in the welfare spending section of this chapter. (46) The change in PSCE in RDEL since October 2024 reported here is higher than the number reported in Chapter 3, because in addition to policy measures it also includes the reclassification of extended producer responsibility revenues from a fee received within DEL to a tax (which boosts receipts and DEL spending equally). (47) More formally, unless otherwise stated these terms refer, respectively, to public sector current expenditure (PSCE) in RDEL and public sector gross investment (PSGI) in CDEL, which is the spending within DELs that is recorded within the National Accounts measure of total managed expenditure. (48) The Government further confirmed that it will update the definition of defence spending to “recognise what security and intelligence agencies do to boost our security”. Under this wider definition, the UK would spend 2.6 per cent of GDP on defence in 2027-28. (50) The DEL allocated for tax compliance is discussed in paragraph 3.34 and set out in Table 3.5 of Chapter 3. (51) This figure includes the Barnett consequentials – changes to the devolved administrations funding allocations – because of UK Government DEL allocations. (52) The ‘reserve stack’ provides details by department of in-year pressures on DEL budgets with an indication of uncertainty and level of agreement from the Chief Secretary to the Treasury (CST). This product has been in place since the 2022 Spring Statement. These percentages compare the level of claims on the reserve as agreed by the CST. (53) The £2.3 billion increase in non-PSGI spending largely reflects the Department for Energy, Security and Net Zero’s (DESNZ’s) receipt of financial transaction (non-PSGI) income from profits made by Bulb, which it then surrendered to the reserve. (54) The October 2024 version of this table excluded one-off items when calculating the annual growth rates. These adjustments have not been used in this table and these figures should not be directly compared to the October 2024 figures. (55) For forecasting purposes, the £2.0 billion in the transformation fund consists of £1.8 billion RDEL and £0.2 billion Scottish Government current AME. (56) For the NHS and schools, where the Government will set spending paths at the upcoming Spending Review, we continue to use our October 2024 assumptions. (57) 2.8 per cent is based on the affordability remit most departments provided to the public sector Pay Review Bodies for 2025-26 pay awards. (58) Here the costs or savings of policy measures exclude the consequences of decisions for the block grant adjustment. (60) Ministry of Housing, Communities and Local Government, Exceptional Financial Support for local authorities, February 2025. (62) Local Government Association, Housing Revenue Account research update, October 2024. (64) This reflects the Monetary Policy Committee’s (MPC’s) stated intention at its September 2024 meeting (Table 6.3). See Bank of England, September 2024 Monetary Policy Report, September 2024. (65) This is based on the average active sales seen in the year to September 2023 and the year to September 2024. Our assumption of a constant pace of active sales is based on guidance issued by the MPC in August 2023 that ‘sales must be conducted in a relatively gradual and predictable manner over a period of time’. (66) HM Treasury, Asset Purchase Facility (APF) ceiling, November 2024. (67) Our forecast also assumes that the APF draws on its cash reserves to cover some of its losses, as agreed between the Treasury and the Bank of England. We assume these payments are made such that the APF’s cash reserves remain constant as a share of the overall value of gilts held in the APF. (70) We invert PSNW to make it more comparable to other balance sheet metrics. An increase in inverted PSNW represents a deterioration in the public finances, similar to an increase in PSND and PSNFL. (71) The Government states in the Charter that: ”this range will support the government’s commitment to a single fiscal event every year by avoiding the need for policy adjustment at forecasts outside of fiscal events”. (72) The figures are calculated using the revisions from our Forecast revisions database. (73) This includes our March 2017 Economic and fiscal outlook, when a negligible forecast deterioration was met by a negligible fiscal tightening, and March 2021, when the policy package included medium-term tax rises to bolster the public finances in the aftermath of the pandemic. (74) See Box 4.3 of the March 2024 Economic and fiscal outlook for more on the sensitivity and volatility of debt interest spending. (75) Based on OBR forecasts since June 2010. (76) Public sector net debt excluding the Bank of England is often used as a measure of underlying debt to remove the distortions of the Bank of England’s Term Funding Scheme and other schemes. (77) Latest outturn and forecast data for nominal GDP is used for constructing all forecasts. This removes the influence of historic revisions to GDP by ONS. Given this, the paths of the forecast for PSND ex BoE as a share of GDP have been restated, consistent with the nominal GDP in this forecast such that it differs to the forecast at the time. (78) From our October 2021 Economic and fiscal outlook, we changed the method for calculating the probability of the fiscal mandate being met to fan charts based on stochastic simulations. Further information on this approach is set out in our Working paper No.17: Evaluating forecast uncertainty with stochastic simulations, December 2021. (79) This is based on internal estimates for the historic level of PSNFL, with the series from ONS beginning on a financial year basis from 1997-98. (81) In both scenarios we assume nominal departmental spending is unchanged from the central forecast. (82) As in the productivity scenario, in all three trade scenarios we do not include any adjustments made by government to departmental spending as a result of changes in the nominal economy or inflation. © 2025 Office for Budget Responsibility 14T, 102 Petty France, London SW1H 9AJ [email protected] TWSTTwist Bioscience Corp TWST reported a quarterly adjusted loss of 66 cents​​ per share for the quarter ended March 31 when the company reported EPS of -79 cents The mean expectation of eleven analysts for the quarter was for a loss of 58 cents per share Wall Street expected results to range from -61 cents to -54 cents per share Revenue rose 23.2% to $92.79 million from a year ago; analysts expected $91.99 million Twist Bioscience Corp's reported EPS for the quarter was a loss of 66 cents​ The company reported a quarterly loss of $39.33 million Twist Bioscience Corp shares had fallen by 0.1% this quarter and lost 15.6% so far this year The mean earnings estimate of analysts had fallen by about 3.4% in the last three months.​ there have been no earnings estimate revisions by analysts covering the company The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 10 "strong buy" or "buy," 2 "hold" and 1 "sell" or "strong sell." The average consensus recommendation for the pharmaceuticals peer group is also "buy" Wall Street's median 12-month price target for Twist Bioscience Corp is $54.00 TGTXTG Therapeutics Inc TGTX reported quarterly adjusted earnings of 3 cents​​ per share for the quarter ended March 31 The mean expectation of seven analysts for the quarter was for earnings of 18 cents per share Wall Street expected results to range from 12 cents to 28 cents per share Revenue rose 90.4% to $120.86 million from a year ago; analysts expected $118.43 million TG Therapeutics Inc's reported EPS for the quarter was 3 cents​ The company reported quarterly net income of $5.06 million TG Therapeutics Inc shares had risen by 10.2% this quarter and gained 44.3% so far this year The mean earnings estimate of analysts had risen by about 22.2% in the last three months.​ The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy," no "hold" and 1 "sell" or "strong sell." The average consensus recommendation for the pharmaceuticals peer group is also "buy" Wall Street's median 12-month price target for TG Therapeutics Inc is $46.00 ONON Semiconductor Corp ON reported quarterly adjusted earnings of 55 cents​​ per share for the quarter ended March 31 The mean expectation of twenty eight analysts for the quarter was for earnings of 51 cents per share Wall Street expected results to range from 49 cents to 59 cents per share Revenue fell 22.4% to $1.45 billion from a year ago; analysts expected $1.40 billion ON Semiconductor Corp's reported EPS for the quarter was a loss of $1.15​ The company reported a quarterly loss of $486.1 million ON Semiconductor Corp shares had risen by 3.0% this quarter and lost 33.5% so far this year The mean earnings estimate of analysts had fallen by about 43.4% in the last three months.​ The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 17 "strong buy" or "buy," 14 "hold" and 1 "sell" or "strong sell." The average consensus recommendation for the semiconductors peer group is also "buy" Wall Street's median 12-month price target for ON Semiconductor Corp is $55.00 12 March 2025 | Economic and fiscal outlook On 16 December 2024 the Chancellor commissioned us to publish our latest outlook for the economy and public finances on Wednesday 26 March We have now agreed the timetable for the forecast process and published the detail below Financial market assumptions and the incorporation of outturn data The final pre-measures fiscal forecast closed on 3 March Our forecast also incorporates recent economy and public sector finances outturn data and the 2024 Blue Book revisions to GDP data which were incorporated into the Quarterly National Accounts published on 30 September 2024 and were too late to be incorporated into our October 2024 forecast When we present fiscal aggregates relative to GDP in the EFO we will ‘re-base’ our October 2024 forecast for these Blue Book revisions in order to make like-for-like comparisons The remaining stages of the forecast, that incorporate the direct effect of the Chancellor’s policy announcements and their expected impact on the economy, will be completed on 21 March. Economic and fiscal outlooks 14T, 102 Petty France, London SW1H 9AJ [email protected] compared to EGP 515.856 billion during February according to the Central Bank of Egypt (CBE) data Foreign assets with the CBE hit EGP 2.344 trillion at the end of February 2025 while foreign assets with banks stood at EGP 1.550 trillion total foreign liabilities with the CBE and banks amounted to EGP 3.133 trillion © 2020-2023 Arab Finance For Information Technology Get insights and exclusive content from the world of business and finance that you can trust ARESAres Management Corp ARES reported quarterly adjusted earnings of $1.09​​ per share for the quarter ended March 31 The mean expectation of fifteen analysts for the quarter was for earnings of 95 cents per share Wall Street expected results to range from 90 cents to $1.01 per share Revenue rose 53.9% to $1.09 billion from a year ago; analysts expected $906.78 million Ares Management Corp's reported EPS for the quarter was breakeven results​ The company reported quarterly net income of $21.86 million Ares Management Corp shares had risen by 7.1% this quarter and lost 11.3% so far this year The mean earnings estimate of analysts had fallen by about 10.4% in the last three months.​ seven analysts negatively revised earnings estimates The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 13 "strong buy" or "buy," 4 "hold" and no "sell" or "strong sell." The average consensus recommendation for the investment management & fund operators peer group is also "buy" Wall Street's median 12-month price target for Ares Management Corp is $159.00 CMICummins Inc CMI reported quarterly adjusted earnings of $5.96​​ per share for the quarter ended March 31 The mean expectation of eighteen analysts for the quarter was for earnings of $4.90 per share Wall Street expected results to range from $4.30 to $5.36 per share Revenue fell 2.7% to $8.17 billion from a year ago; analysts expected $8.19 billion Cummins Inc's reported EPS for the quarter was $5.96​ The company reported quarterly net income of $824 million Cummins Inc shares had fallen by 4.3% this quarter and lost 14.0% so far this year The mean earnings estimate of analysts had fallen by about 3.5% in the last three months.​ eight analysts negatively revised earnings estimates The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 8 "strong buy" or "buy," 15 "hold" and 1 "sell" or "strong sell." The average consensus recommendation for the auto truck & motorcycle parts peer group is also "hold" Wall Street's median 12-month price target for Cummins Inc is $331.50 This is compared with a surplus of R3.36bn in the same month last year National Treasury data showed on Wednesday All rights reserved. © 2022. Bizcommunity.com Provided by SyndiGate Media Inc. (Syndigate.info) HSICHenry Schein Inc HSIC reported quarterly adjusted earnings of $1.15​​ per share for the quarter ended March 31 The mean expectation of fifteen analysts for the quarter was for earnings of $1.11 per share Wall Street expected results to range from $1.04 to $1.16 per share Revenue fell 0.1% to $3.17 billion from a year ago; analysts expected $3.23 billion Henry Schein Inc's reported EPS for the quarter was 88 cents​ The company reported quarterly net income of $110 million Henry Schein Inc shares had fallen by 4.7% this quarter and lost 5.6% so far this year The mean earnings estimate of analysts had fallen by about 6.1% in the last three months.​ The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy," 10 "hold" and 1 "sell" or "strong sell." The average consensus recommendation for the medical equipment supplies & distribution peer group is also "buy" Wall Street's median 12-month price target for Henry Schein Inc is $79.44 The April Federal order benchmark Class III milk price was announced by the USDA at $17.48 per hundredweight (cwt.) It is the lowest Class III price since April 2024 The four-month Class III average is at $19.16 Late Friday morning Class III futures portended a May price at $18.50 June at $17.82 and July at $18.19 with a peak of $18.63 in September Another drop in the All Milk Price and a rise in alfalfa hay pulled the milk feed price lower again The USDA’s latest Ag Prices report shows the March ratio at 2.46 More: The US dollar continues to fall amid the Trump tariff tit for tat The index is based on the current milk price in relationship to feed prices for a ration consisting of 51% corn One pound of milk would purchase 2.46 pounds of dairy feed of that blend The All Milk Price averaged $22.00 per cwt down $1.60 from February which had a 4.43 test The national corn price averaged $4.57 per bushel the March average cull price for beef and dairy combined was at $140 per cwt. Quarterly milk cow replacements averaged $2,870 per head in April Cows averaged $2700 per head in California Wisconsin’s average at $3,130 per head was up $270 from January and $750 above 2024 “The All-Milk price was lower for the second month in a row while feed costs were higher for the fourth straight month to put the milk-feed ratio lower,” says dairy economist Bill Brooks “Milk production margins moved lower for the third time in the past four months but remained at historically high levels and were $1.76 per cwt “Income over feed costs in March were above the $8 per cwt level needed for steady to higher milk production for the seventeenth month in a row Input prices were mixed with two of the three input commodities inside of the top ten for March all-time Feed costs were the ninth highest ever for the month of March and increased 16 cents per cwt The All-Milk price stayed in the top ten for the month at the third highest ever recorded for the month.” “Milk income over feed costs for 2024 were $13.39 per cwt.,” says Brooks “Income over feed in 2024 was above the level needed to maintain or grow milk production using April 30 CME settling futures prices for milk and soybeans plus the Stoneheart forecast for alfalfa hay Income over feed in 2025 would be above the level needed to maintain or grow milk production and down 40 cents from last month’s estimate,” Brooks concludes This week’s Crop Progress report shows U.S 1% behind a year ago and 2% ahead of the five-year average 1% ahead of a year ago and 1% ahead of the five-year average The latest weekly slaughter report showed 45,400 dairy cows were sent to slaughter the week ending April 19 down 1,900 from the previous week and down 9,700 or 17.6% from a year ago Cash dairy prices started May mostly higher as much of the dairy industry gathered this week in Chicago for the American Dairy Products Institute annual conference Speaking in the May 5 Dairy Radio Now broadcast HighGround Dairy’s (HGD) Curtis Bosma said the eyes of attendees are on domestic demand which for the past year or so has been for weakened More: No poison please: Organic milk sales continue to increase The “silver lining” is the discount that U.S He said there was a lot of chatter at the conference about export opportunities although there are some complications with respect to what types of cheese and butter the U.S those deals will always find a way to come together.” When asked how big an impact the tariff tit for tat was having with countries that we do have tariffs with and where the tensions are the only region or country that is somewhat problematic is China.” He said there has been a lot of front loading going on in first quarter first quarter gross domestic product (GDP) data you see that it posted its first negative year to year growth in a couple years was due to “the net importer-export factor that’s in there it’s pretty safe to assume that most companies or businesses that rely on goods or materials from overseas are bringing in things or restocking things as quickly as possible to make sure they weather any storms that may arise later this year.” food and agricultural exports to Mexico have surged 65% over the past four years making it the fastest growing export market for a host of American agricultural commodities and products exports has been spurred by the country’s booming post COVID-19 economy and a rapidly growing manufacturing sector.” “The economic upswing has allowed Mexican consumers to expand their traditional diet food and agricultural producers are helping meet the country’s growing demand for meat food and ag exports to Mexico climbed to $31.4 billion the top market at $32.4 billion,” according to CoBank A new research brief from CoBank’s Knowledge Exchange says “Mexico will likely surpass Canada to claim the top spot for the first time in 2025 despite some emerging headwinds.” after the cheese plunged 13.50 cents the previous week the cheddar blocks closed May 2 at $1.76 per pound The barrels saw their Friday finish at $1.7550 Sales totaled 28 loads of block on the week and 132 for the month of April Barrel sales totaled 12 for the week and 66 for April Central region cheese demand has been strong in recent weeks but contacts tell Dairy Market News (DMN) that spot activity was somewhat muted this week as cheesemakers said inventories are tight while others said they’re are becoming more available Milk output is trending higher in the region and milk at mid-week was reported as low as $7-under Class Milk output has passed spring peak in the West but cheese manufacturers have enough available Production varies from somewhat lighter to somewhat stronger A few manufacturers note tight spot load availability regardless of what type of cheese is requested Domestic demand varies from lighter to steady Food service remains comparatively less robust than retail More: Escalating trade war between the US and China is set to impact the global dairy market Spot butter fell to $2.24 per pound Tuesday but still 74.50 cents below a year ago when it was trading at $3.0750 There were 20 CME sales on the week and 116 on the month Central butter makers are actively churning as cream remains plentiful but increasing seasonal demand from ice cream makers has drawn inventories down somewhat from early spring Cream multiples have increased slightly at the bottom of the range Spot loads are available and some are freezing product for use later in the year More: Average Americans are closer to living on streets than like Elon Musk Seasonally strong milk production is beginning to tick down from the peak of spring for some parts of the West butterfat component levels continue to be more than sufficient Butter manufacturers were keeping their churns busy Inventories are generally growing despite strong export demand but retail demand remains comparatively more robust than food service Domestic prices remain competitive internationally despite trade policy changes that have taken place this year Grade A nonfat dry milk saw its close at $1.1950 per pound Friday There were 22 sales on the week and 50 for the month Dry whey closed Friday at 52 cents per pound up 1.50 cents and 12.50 cents above a year ago There were 5 sales on the week and 33 for the month milk production decreased 0.2% in 2024 to 226 billion pounds The annual average number of milk cows on farms was 9.34 million head Cash receipts from milk marketings totaled $50.7 billion down 0.2% from 2023 and included whole milk sold to plants and dealers and milk sold directly to consumers An estimated 985 million pounds was used on farms where produced with the remainder consumed in producer households the Dairy Products Summary reported total cheese production in 2024 at 14.2 billion pounds California produced 2.481 billion pounds in 47 plants and accounted for 42.3% of total cheese in 2024 Mozzarella accounted for 79.5% of the Italian production Wisconsin was the leading State with 28.3% of the total and accounted for 39.1% of total cheese in 2024 Wisconsin again was the leading state at 19.7% Cheddar output came in at 3.785 billion pounds Butter production totaled 2.24 billion pounds California was the Number 1 butter producer Nonfat dry milk for human consumption totaled 1.67 billion pounds and whey protein concentrate totaled 495 million pounds More: Producers are battling costly retains in their milk checks resulting in some exiting the dairy business Good old fashioned ice cream totaled 886 million gallons Low fat ice cream amounted to 412 million gallons the Consortium for Common Food Names (CCFN) National Milk Producers Federation and U.S Trade Representative’s (USTR) decision to spotlight protection of common food names in the agency’s 2025 Special 301 Report issued last week A joint press release stated “The annual report outlines major global intellectual property concerns It highlighted the European Union’s persistent campaign to monopolize common names such as “parmesan” and “feta” through protectionist geographical indication (GI) policies These efforts restrict the use of widely recognized food and beverage terms to only specific European producers and effectively cut U.S "The European Union’s approach to geographical indications is entirely unacceptable It intentionally crowds out fair competition by restricting market access for U.S and international producers," said Jaime Castaneda "Too many trading partners have been coerced into imposing trade barriers for products using common food and beverage names We appreciate USTR’s ongoing recognition of this issue but urge the U.S government to stop trading partners to succumbing to European pressures and imposing trade barriers on U.S Lee Mielke is a graduate of Brown Institute in Minneapolis He’s formerly the voice of the radio show “DairyLine” and his column appears in agricultural papers across the U.S