Helen Chandler-Wilde: The Unknowable Economic Future

At lunchtime today we got the spring statement from the chancellor. After previous politically messy fiscal events, this time Rachel Reeves kept it simple with no major policy changes, while increasing her fiscal room to deal with the Middle East crisis.

The focus instead was on a range of forecasts released at the same time by the Office for Budget Responsibility. Most eye-catching were downgraded GDP forecasts for this year – but raised ones for 2027 and 2028. Not to be all Eeyore, but this isn’t as much of a salve as it seems: much like the weather, the further out you go, the fuzzier economic forecasts tend to be, meaning a predicted bump to growth in a few years’ time is simply not as valuable as one this year. One in the hand is worth two in the bush.