Funding the Future The Budget: No growth. No hope?
Nov 27, 2025
The discussion dives into the stark contrast between government claims and the grim realities revealed by the Office for Budget Responsibility's data. Interest rates are set to remain high, raising concerns about government borrowing. Predictions show stagnation in real GDP growth and household incomes. The podcast scrutinizes unrealistic inflation assumptions and highlights the troubling rise of imports over exports. With warnings about increasing reliance on foreign capital, the conversation paints a picture of a brittle economy with no clear plan for improvement.
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Interest Rates Predicted To Stay High
- Richard Murphy highlights that the OBR forecast predicts UK interest rates will remain high and even rise through 2030.
- He argues the Bank of England's quantitative tightening, not markets, is driving these elevated borrowing costs.
Growth Forecasts Are Weak
- The OBR's real GDP growth forecast shows only lukewarm recovery, under 2% through 2030.
- Murphy says this low-growth path signals neoliberal policy failure and poor outcomes for people.
Inflation Reversion Is Questionable
- The OBR assumes inflation returns to a 2% target by 2027, which Murphy calls unrealistic.
- He criticises the OBR for relying on mean-reversion assumptions and ignoring real-world shocks.