Was there anything sensible in the OBR forecast? They were probably right to push their growth forecast down to nearer the consensus at 1.1% for this year, and to increase their unemployment forecast to 5.3%. Most were assuming this from private sector forecasts anyway.
They forecast that inflation will be at the target level of 2% in 2027, 2028, 2029 and 2030. That would be highly unusual. One of its foundations is their forecast that oil prices over those years will stay within a narrow range of around $62-68. That is also unlikely.
They assume that housebuilding will boom from the current 220,000 a year to hit 300,000 a year by 2029-30. So by the last year of this Parliament housebuilding will at last have reached the annual run rate the government promised, but will of course have fallen well short of the 1.5m target over the 5 years. There is no obvious reason to forecast such a big rise.
They think base rate will start to rise again from next year. They also expect the average government borrowing rate to hit a crippling 5.2% in 2029/30, up from 4.4% this year. This is not a background for more home purchase. It will confirm it has always been dearer for Reeves to borrow than the previous government.
They do make some plausible forecasts. They say the tax burden which was 38.8% of GDP in the last Conservative year will hit a terrifying 42.5% in 2029/30. That’s a 12% real increase in tax bills.
They expect gas production in the UK to halve (2030/31 on 2024/5) as a result of the manic close down our industry policy. They expect welfare spending to surge by £75 bn or 24%.
They estimate Bank of England losses to be paid for by taxpayers at £89 bn between 2025/6 and 2029/30! Still they do nothing to reduce them.
March 5, 2026
Indeed surely correct and all hugely depressing. This on top of Starmer, Lammy’s and it seem mainly Miliband’s destruction of the USA special relationship. I assume he is a bit upset by Trump pointing out how insane his 4 times the price Net Zero energy policy is!
A Heath excellent to day. Kemi says Starmer defence forces “are catching arrows rather than dealing with the archers” but we did not even catch the arrows did we?
Three more years of this lunacy probably under Rayner, Streeting, Miliband or Mamood in order of the betting odds!
March 5, 2026
Reported in the Telegraph today:-
“Ed Miliband led Cabinet opposition to US military action in Iran and the use of Britain’s bases.
In a meeting on Friday ahead of the strikes, Mr Miliband, Rachel Reeves and Yvette Cooper are understood to have strongly opposed British support for pre-emptive military action, which they believed would be illegal.“
So Starmer went along with this destroyed the USA/UK relationship and put their forces at extra risk only to change his mind a few hours later. The man is pathetic and hugely dangerous to the UK.
March 5, 2026
Allister Heath’s previous article yesterday? was very good too.
“Vast forces are mobilising to stop Britain’s only real chance of survival
The plot to topple the next Right-wing government has already begun”
March 5, 2026
Yet again a war in the middle east has exposed us to unwelcome volatility in the price of fossil fuels. The IRGC has now closed the Straits of Hormuz and has struck loaded oil tankers with drones. A tanker is reported to be on fire off Kuwait this morning.
Of course, as is customary here, the forecourts have immediately ramped up the price of unleaded by 8p a litre
UK natural gas futures jumped more than 40% on Monday. This unwelcome increase in the price of gas is going to have a dramatic effect on the spot UK electricity price, unless you have a fix from your supplier
Once more, the wisdom of replacing CCGT generation of electricity by renewable resources is apparent.
March 5, 2026
The bigger the government the smaller the citizen. Is that the policy?