IFS Zooms In: The Economy The Autumn Budget explained
Nov 27, 2025
Ben Zaranko and Christine Farquharson, both esteemed economists from the IFS, delve into the surprises of the recent Autumn Budget. They discuss why the anticipated fiscal repair didn’t materialize, spotlighting a fortunate rise in tax receipts. Christine highlights significant reforms, such as abolishing the two-child limit and increasing funding for special educational needs. They also explore new policies, including a mansion surcharge and the impacts of a fuel duty freeze, ultimately questioning the budget’s long-term growth strategy.
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Forecast Luck Averted A Fiscal Repair
- The OBR's unexpected upgrade to tax receipts largely offset a productivity downgrade, avoiding a big fiscal repair job.
- That upgrade is uncertain because current data don't yet show the higher receipts the OBR forecasts.
Revenue Upgrade Is Risky Not Proven
- The OBR built higher inflation and wage growth into receipts without strong signs in current data, making the forecast risky.
- If those receipts don't materialise, the fiscal position could worsen within a year.
SEND Costs Move From Local To Central
- SEND spending is rising fast and the OBR has for the first time put official forecasts on it, creating a material fiscal pressure.
- Central government will assume overspend risk from 2028, forcing future trade-offs or reforms.