The Rest Is Money 228. BUDGET SPECIAL: Where's The Growth?
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Nov 27, 2025 The hosts dive into the unexpected early release of budget documents and its implications for accountability. They tackle Rachel Reeves' budget strategies, revealing political motives behind significant policy changes, like abolishing the two-child limit. A critical look at tax rises unfolds, questioning their credibility and market reactions. The discussion shifts to stagnant living standards and forecasts of no growth, with insights on the impact of minimum wage hikes on youth employment and the pressing reality of student loan repayments.
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OBR Pre-Publication Catastrophe
- The OBR accidentally published the entire budget nearly an hour before Rachel Reeves spoke, causing market-sensitive information to leak.
- Robert Peston describes it as a catastrophic pre-publication failure that left the Chancellor devastated and markets unsettled.
Budget Aimed At Political Survival
- The budget seemed designed primarily to protect the political survival of Rachel Reeves and Keir Starmer.
- Markets reacted modestly well but would have rewarded tougher tax moves with a larger fall in borrowing costs.
Choose Credibility Over Short-Term Politics
- Demonstrating willingness to take difficult fiscal decisions can lower borrowing costs more than politically cautious choices.
- Policymakers should weigh short-term political risk against long-term market credibility when setting tax policy.