The Office for Budget Responsibility insists there is still a 55% chance of the budget surplus being achieved Continue reading...

Britain’s fiscal watchdog has being quizzed about the UK budget

OBR says Treasury will breach welfare cap by £20bn over duration of current parliament after cuts reversalThe Treasury will breach its self-imposed welfare cap by £20bn over the duration of the current parliament following the U-turn on disability benefits, the government’s spending watchdog has confirmed.The Office for Budget Responsibility (OBR) said the reversal of a cut in personal independence payments (PIPs)would add another £1.3bn a year to a welfare budget that was already £2.7bn over a limit set by George Osborne before the general election last May. Continue reading...

Higher oil prices, rising wages and dearer imports as a result of a falling pound could push up prices during the course of 2016Fears of a rise in UK inflation have proved unfounded after the latest official figures showed the annual increase in the cost of living unchanged at 0.3% in FebruaryCheaper secondhand cars helped to offset rising food prices to keep the inflation rate well below the government’s 2% target last month, the Office for National Statistics said. Continue reading...

Official figures show that the chancellor George Osborne will need to borrow more this financial year than the lastGeorge Osborne’s plan to cut the budget deficit remained off-track in February after self-assessment tax receipts increased by only a small margin.Official figures showed that borrowing is likely to be higher in this financial year than in 2014-15, in breach of the chancellor’s supplementary fiscal rule that the annual deficit falls in each year of the parliament.Related: Osborne prepares to defend budget as Ken Clarke questions whether welfare cuts ruled out - Politics live Continue reading...

People in the most economically deprived parts of the country report bigger rises in ill health since 2001 than those in wealthier areas cushioned from the cutsIf you’d followed some of the political fallout of Iain Duncan Smith’s resignation over the weekend, you’d be forgiven for thinking the main casualty of his time in office was now David Cameron’s pride, and the hopes of the Remain campaign. While the former work and pensions secretary said he was resigning as he could no longer inflict cuts on the poor, disabled people, young families and anyone who isn’t comfortably wealthy, few commentators believed he’d actually found his conscience at long last.Related: Iain Duncan Smith has revealed the empty truth of compassionate conservatism | Suzanne MooreRelated: Death has become a part of Britain’s benefits system | Frances Ryan Continue reading...

House prices in Cambridge have risen 50% since 2010 – caused in part by Chinese investors whose passion for the city may have begun with a poem they learned at school. But what do local residents make of this romantic vision?On the edge of Scholar’s Piece, the strip of farmland just behind King’s College, lies a granite stone which has become arguably Cambridge’s most coveted tourist attraction.

Prospect of lengthy negotiations to secure new UK relationship with EU would deter foreign investors, warns Moody’sBritain’s biggest companies could face a credit downgrade – potentially forcing up their borrowing costs – should the UK vote to leave the EU in June, according to a report by a leading ratings agency.Moody’s said the prospect of lengthy and uncertain negotiations would deter foreign investors and limit the profits of mainstream corporations that trade with the rest of the EU. But banking and insurance would be less affected than non-financial companies. Continue reading...

Brexit fears are swirling again as Britain’s government suffers a shock resignation

In his long read on the Institute for Fiscal Studies (15 March) Simon Akam quotes Paul Johnson, its director: “It’s the data that is doing the talking.” This sounds dangerously like newspeak for that old canard “the facts speak for themselves”. In 1961, the historian EH Carr wrote: “The facts speak only when the historian … decides to which facts to give the floor, and in what order or context … It was, I think, one of Pirandello’s characters who said that a fact is like a sack – it won’t stand up till you put something in it.”What the father in Pirandello’s Six Characters in Search of an Author actually says is: “A sack won’t stand up when it’s empty … To make it stand up it has to be filled with the reasons and the feelings that caused it.” Or to put it most succinctly, “No fact without theory”. Continue reading...

The chancellor’s budget disaster comes at a time when the prime minister needs him to play a pivotal role in the EU debateBritain faces a cocktail of economic risks. Such has been George Osborne’s persistent message since the start of 2016. He talked about the slowdown in China. He fretted about the turmoil in financial markets. He warned that growth was still weak in the eurozone. What probably never crossed the chancellor’s mind was that speculation over his own future might be part of the mix.There is no getting away from the fact that the budget and its aftermath have been a political and personal disaster for Osborne. Even while he was speaking, it was clear that the package would quickly fall to pieces. The budget could only make the sums add up through blatant accounting tricks. It announced tax cuts at the same time as it cut estimates for Britain’s long-term growth potential. Even worse, it provided tax breaks for the better off at the same time as it targeted the disabled.Related: If I were George Osborne I’d be starting to sweat about Tory unpopularity | Martin Kettle Continue reading...

The chancellor is becoming increasingly hamstrung both by his political propaganda and his own self-imposed rulesIt would be interesting to know if George Osborne, while preparing last week’s budget, had time to see the first instalment of Norma Percy’s television series on the Obama White House. If so he might have been reminded of something historically interesting, namely a matter about which the chancellor, who fancies himself as a historian, has not been straight with the public.More or less from his arrival in the Oval Office in 2009, Barack Obama’s first year was dominated by the financial crisis. And, curious though it may seem to the many who have swallowed Osborne’s propaganda, the banking crisis in the US, rather like the banking crisis in the rest of the developed world, was not caused by Labour. Continue reading...

We reveal the fears and desires influencing UK voters, from worries about war to an enduring attachment to stereotypes• Read the survey results in full hereAlf Garnett: Well, I mean, if we go into Europe…Else Garnett: I thought we was in Europe. I mean, I thought we always have been.Related: Britons and Europe: the survey resultsRelated: Anxious, atomised… and not in it together: the state of Britain in 2015Related: Being European: what does it mean? Continue reading...

It is believed to bring luck and good health, but prices that have soared by 1,000% in past five years could go into reverseForty million years ago a group of ants sat on a tree trunk watching another ant at work. A drop of sap welled over them; the rest is palaeontology. The ants’ story has come alive in Poland where a pendant featuring the Tertiary Period work scene is one of the main attractions of Amberif, the annual amber trade fair. In the past five years, amid soaring interest from China, the gram price of amber has overtaken that of gold. But now there are fears the Chinese economic downturn is about to impose an ice age chill on the sector.Related: Burritos, cheese and Bowie: curious bonds and unusual investments Continue reading...

Iain Duncan Smith, the work and pensions secretary has resigned from David Cameron’s cabinet. Duncan Smith submitted his resignation to Cameron on Friday night in a letter in which he cited the plans to cut disability benefits - the Personal Independence Payment (PIP) - as the main reason for his move . Duncan Smith says the cuts are for the benefit of higher earners. David Cameron has expressed surprise at the resignation

Another budget, another set of dodgy statistics. The chancellor’s rosy autumn statement seems a long time ago. Speaking of ‘a long time ago’...The Office for National Statistics has just released a revised list of items that determine the consumer price index. In come lemons, cream liqueurs, large bars of choccy and a restaurant main course and out go organic carrots, gloss paint, cooked sliced turkey and pub snacks. Such is life in 2016 Britain. Or maybe not, as the ONS doesn’t have the best of track records for getting things right. Continue reading...

The chancellor’s sums could only be made to add up by some rather blatant accounting tricks, disapprovingly debunked by thinktanks and observersGeorge Osborne had a plan when he arrived at the Treasury in May 2010. He would take on the task of repairing the hole in the UK’s public finances and complete the job within a single parliament. It was an ambitious plan: too ambitious, as it turns out.Austerity was extended into a second five-year parliament, and as a result of the chancellor’s eighth budget, now persists into a third, according to the Institute for Fiscal Studies. As things stand, the only way the government can meet its target of running a budget surplus in 2020-21 is if it cuts an additional £10bn in Whitehall spending.Related: Budget 2016: IFS savages tax claims as 'rhetorical nonsense'Related: Budget bashing gives George Osborne a shrinking feeling Continue reading...

Institute for Fiscal Studies calls Osborne’s points about lower income jobs disingenuous and slams fuel duty freezeThe Institute for Fiscal Studies has criticised George Osborne for a misleading budget pledge to help Britain’s lowest paid workers, and warned that the chancellor’s new soft drinks tax could backfire by raising sugar consumption.

Data shows one in six staff are overqualified for their role with a further one in six undereducatedAlmost one in three workers are either overqualified or underqualified for their jobs, according to new figures that deal a fresh blow to hopes that the UK can lift its productivity growth out of the doldrums.Data from the Office for National Statistics shows the proportion of workers “matched” to their job has dropped steadily in recent years. Continue reading...

MPC keeps interest rates at historic low of 0.5% despite steep fall in sterling linked to EU referendumThe Bank of England has kept the UK base interest rate at its historic low of 0.5% despite a steep fall in the value of sterling linked to the EU referendum, which policymakers said was likely to exert upward pressure on inflation.The BoE said disappointing business investment and the weaker outlook for global trade would offset the impact of a cheaper pound and keep inflation in check in the short term before a rise to its 2% target within the next two years.Related: QE, inflation and the BoE's unreliable boyfriend: seven years of record low rates Continue reading...

Civil society activists warn panel on economic empowerment not to ignore the unpaid work that women do, which blocks their path to better payBold promises to empower women economically will come to nothing if the structural barriers that prevent women from getting decent jobs are not removed, civil society groups have warned.A high-level panel backed by the World Bank, UN Women, the International Monetary Fund and the International Labour Organisation (ILO) is producing an action plan to improve women’s economic opportunities over the next 15 years.Related: Bertha Cáceres: 'My mother’s is not the first assassination. I don’t want another'Related: UN Women's head: 'Historic shift' needed to find concrete ways to end gender inequalityRelated: Tackling gender inequality could add $12tn to world economy, study finds Continue reading...

Republican frontrunner could damage trade and increase Middle East instability if he wins US presidency, say analysts

Many factors are conspiring to make the US public fearful despite the low oil price but investors should recall that markets tend to climb a ‘wall of worry’The latest season of House of Cards got a lot of things right except (small spoiler alert) the price of gas. Francis Underwood, our sociopathic slimeball in chief, is facing an economic crisis thanks to sky-high gas prices. In the real world gas prices haven’t been this low for close to a decade. In January there was a station in Ohio pumping gas at $1.20 a gallon. And yet, just as in Underwood’s world, fear spurred by economic uncertainty roils the land.Gasoline prices are now more than 20% below where they were a year ago, leaving a lot more cash in the pockets of most Americans. In times gone by, lower gas prices seemed all that was required for a mini-flurry of optimism to take hold, in both the economy and the stock market. But not this year – not by a long shot.Related: Fuel prices around the world - in pictures Continue reading...

Chancellor will have to raise taxes or make further cuts if OBR downgrades its forecasts again, IFS thinktank saysGeorge Osborne has only a 50% chance of fulfilling his plans to deliver a £10bn surplus on the public finances by 2020, the director of the Institute for Fiscal Studies (IFS) has said.On Wednesday, Osborne was forced to acknowledge in his budget statement that a sharp deterioration in the growth forecasts published by the Office for Budget Responsibility (OBR) meant the public finances were £56bn weaker than expected over the next five years, more than reversing the £27bn windfall the OBR predicted as recently as November.Related: Budget 2016: magical thinking from charmed world of the chancellor | Jonathan Freedland Continue reading...

Chancellor announces eye-catching measures including sugary drinks levy and tax cuts, but Office for Budget Responsibility warns of fiscal holeGeorge Osborne’s attempt to woo voters ahead of Britain’s EU referendum has come under immediate and intense scrutiny after he used a range of accounting devices to disguise a looming £56bn “black hole” in the government’s finances and deliver a promised surplus by the end of the decade.Despite being faced with a markedly weaker outlook for the economy, the chancellor announced a range of eye-catching measures on Wednesday including a levy on sugary drinks, lower income tax bills, a cut in corporation tax and help for small businesses, in a budget he said would “put the next generation first”.Related: What the 2016 budget means for youRelated: We won't cut spending, McDonnell promises as Labour derides budgetRelated: Budget 2016: magical thinking from charmed world of the chancellor | Jonathan Freedland Continue reading...

Huge cuts in payments to disabled people sit alongside a major tax giveaway to the super-rich. At the heart of this budget is unfairnessGeorge Osborne delivered a budget built on failure. He failed on closing the government deficit. He has failed on reducing the government debt. His politically precious but economically nonsensical target for a budget surplus at the end of this parliament is remaining intact only as a result of creative accounting, shuffling around billions in corporation tax revenues.Related: Budget 2016: magical thinking from charmed world of the chancellor | Jonathan FreedlandRelated: The Guardian view on the budget: a poorer country, a diminished chancellor | Editorial Continue reading...

Shadow chancellor sets out economic plans, while Jeremy Corbyn says George Osborne budget has ‘unfairness at its very core’Labour will fight the next general election campaign without any plans for spending cuts, the shadow chancellor John McDonnell has said.After the party’s leader, Jeremy Corbyn, said George Osborne’s budget was laced with “unfairness at its very core”, the shadow chancellor pledged to eliminate the current budget deficit by stimulating greater economic growth and leading a more effective crackdown on tax avoidance. Continue reading...

US central bank has said that rates will stay at 0.25% to 0.5% for at least another month as most economics predict a hike will be announced in JuneThe Federal Reserve (Fed) put any further increase in US interest rates on hold on Wednesday, announcing rates will remain unchanged for at least another month.The potential hike was postponed after fears of a slowdown in China and collapsing oil prices have rattled investors worldwide.Related: Fed: strong US job market may justify multiple interest rate increases this yearRelated: Janet Yellen hints further rate rises on hold amid plunging marketsRelated: Federal Reserve meeting minutes show uncertainty about global economy Continue reading...

Growth forecasts down and no coherent narrative – the chancellor delivered a difficult budget statement. Surely not even Jeremy Corbyn could make it worse?Sometimes a man’s gotta do what a man’s gotta do. Given the choice George Osborne would rather have stayed in bed watching Jeremy Kyle. Failing that he’d have settled for appearing on Jeremy Kyle. Anything but give a budget statement in which he would have to admit that almost everything he’d said on his previous three budgets had turned out to be either misleading or inaccurate.Related: George Osborne uses budget to convince Tories of his leadership qualities Continue reading...

Office for Budget Responsibility analysis indicates chancellor’s hopes of achieving surplus appear at odds with policy of reducing net migrationGeorge Osborne’s hopes of securing a budget surplus by the time of the next general election rest on continuing high levels of net migration to Britain, the Office for Budget Responsibility has made clear.

Chancellor gives go-ahead to Jamie Oliver initiative, while Office for Budget Responsibility says economy has been dealt permanent blow by 2008-09 crisisGeorge Osborne has placed a tax on sugary drinks at the centre of his budget, as he sought to mask a significant downgrade to Britain’s economic potential with a flurry of initiatives and giveaways to small businesses, motorists and savers.Delivering his final budget before voters decide whether Britain should remain a member of the European Union on 23 June, the chancellor said he would seek to “put the next generation first” and introduced a proposal for a sugar levy that was welcomed by TV chef and food campaigner Jamie Oliver.Related: Budget 2016 live: Treasury clarifies Osborne's maths teaching pledgeRelated: George Osborne's budget is for the very short term onlyRelated: Jeremy Corbyn says budget has 'unfairness at its very core' Continue reading...

George Osborne has unveiled the budget. Here are 26 key pointsThis aims to raise £520m in a two-part levy on companies – one for total sugar content above 5g per 100ml and one for drinks with more than 8g per 100ml – to be introduced in two years’ time. Pure fruit juice and milk are excluded. It will be used to fund sport and longer school days.Rowena Mason, political correspondent This is a big political story after pressure from the medical community to act on obesity. Cameron was said to be sympathetic, then backtracked, but has now taken the plunge. Some Conservatives may not be happy with the nanny statism but the government will be able to rely on opposition support to get it through.RM The increase in the 40p threshold is another tax cut for high earners to delight the Tory backbenches. The personal allowance changes will benefit middle and some lower earners too but not those at the very bottom of the income scale who are already taken out of tax altogether.RM This explains measures to boost saving in last year’s budget which have still not come into force, and introduces new incentives for saving. It is meant to ‘put the next generation first’ but Labour is likely to point out that many people can hardly afford day-to-day costs, let alone setting aside thousands of pounds in savings.RM Osborne has not dared to increase fuel duty for fear of a huge revolt among Tory backbenchers. The original campaigner for fuel duty freezes, Rob Halfon, ended up as the chancellor’s parliamentary private secretary and is now deputy chair of the Conservatives.RM This extra tax was a great cash cow for the Treasury when the oil price was high but has proved punishing for the industry now it has slumped.RM Osborne gives with one hand to business and takes away with the other. The climate change levy is a tax on non-domestic users to encourage them to reduce energy consumption. He is, however, abolishing the carbon reduction commitment - a complicated reporting regime that was only introduced in 2010.Related: Budget 2016 live: George Osborne claims Britain on course for budget surplusRM This is due to the ‘storms’ gathering in the economy that Osborne has been heavily emphasising recently. He is also trying to set the weaker figures in an international context, saying the UK is still growing faster than other countries. However, the negative economic news is being overshadowed by interest in the sugar levy.RM Osborne has risked infuriating pro-Brexit colleagues by using the platform of the budget and independent OBR advice to make the case for the UK staying in the EU. But he has obviously calculated that it is worth the row to hammer home the fact that the UK’s fragile growth figures are predicated on staying in the EU.RM Once again the chancellor is stressing the uncertain economic environment. It certainly helps the cause of the campaign to stay in the EU to keep repeating that the UK is in a risky economic position that should not be jeopardised by Brexit.RM Osborne is pressing ahead with austerity as usual, despite some financial voices saying there is no need to at this point and when the economy is still fragile. Some of this will come from cuts to benefits for the disabled. The chancellor tried to downplay it by saying the overall disability budget would rise by £1bn but this is less than it would have been without £1.2bn of savings due to reforms of the personal independence payment.RM Only last year the chancellor thought he would have a surplus of around £23bn to play with this year. However, this was later revised down to £10bn. He is sticking to this target now as a result of further spending cuts.RM Time and time again, Osborne unveils plans to find extra billions through crackdowns on tax avoidance that never seem to yield as much as predicted. He is now ending several loopholes, including stopping multinationals over-borrowing in the UK and then deducting interest bills from their British profits and restrictions on offsetting losses against tax from 2019.RM This is what the prime minister must have meant when he talked about a pro-business budget. Labour is likely to question whether companies should be getting even lower tax, when welfare is being slashed even further.RM This is likely to delight small businesses as rates are a deeply unpopular tax that disadvantage high street shops compared with online retailers. However, it will be councils that suffer as they are getting revenue from business rates devolved to them.Osborne is hailing the move for London as a triumph for devolution but it will be less lucrative than currently because he is slashing rates for small businesses at the same time.RM This is a handy cut for the Tory effort in Wales where there are assembly elections in May.RM This could be seen as a partial win for the Labour leader, Jeremy Corbyn, who has repeatedly raised the topic. However, there are not many details at present about how it will be used.RM Osborne is ploughing on with funding announcements for his “northern powerhouse”, although these will not be built for quite some time.RM The government came in for heavy criticism for under-funding flood defences during the last winter crisis. This looks like it could allow ministers to say they are increasing it more than in the last parliament.RM Osborne has been emphasising that this is a budget for the next generation. At the same time, ministers are opening themselves up to charges of being overly ideological with their determination to take schools out of council control for little gain.RM ‘Sin taxes’ are an easy way for the chancellor to raise a bit extra. Few can object to raising additional money from smoking.RM Osborne was mocked for being patronising to voters with his ‘beer and bingo’ budget of 2014, but freezing alcohol duty is a popular move that is simple to sell on the doorstep.RM He skated over this quite quickly but this is a massive change to benefit investors when they make money. Labour’s Chris Leslie said: ‘Lots of very wealthy people will be delighted with massive giveaway.’ Continue reading...

Has George Osborne’s sugary bunny sweetened the pill of further cuts, and is this his big pitch for the leadership? Continue reading...

• Proceeds of levy on soft drinks to fund school sports

Social injustice on an unprecedented scale, massive inequities and loss of trust in elites define our political moment – and rightly soSomething interesting has emerged in voting patterns on both sides of the Atlantic: young people are voting in ways that are markedly different from their elders. A great divide appears to have opened up, based not so much on income, education or gender, as on the voters’ generation.There are good reasons for this divide. The lives of both old and young, as they are now lived, are different. Their pasts are different, and so are their prospects. The cold war, for example, was over even before some were born and while others were still children. Words such as socialism do not convey the meaning they once did. If socialism means creating a society where shared concerns are not given short shrift – where people care about other people and the environment in which they live – so be it. Yes, there may have been failed experiments under that rubric a quarter- or half-century ago; but today’s experiments bear no resemblance to those of the past. So the failure of those past experiments says nothing about the new ones. Continue reading...

Unemployment rate has held at 5.1%, while average weekly earnings for employees has risen 2.1% in three months to JanuaryUK unemployment has held at a 10-year low and wage growth has edged up, according to official figures that provide a small, pre-budget boost for George Osborne.Average weekly earnings for employees rose 2.1% in the three months to January compared with a year earlier, the Office for National Statistics (ONS) said. That was faster than the 2% growth rate in the previous three months. It also beat economists’ forecasts for another 2% reading in a Reuters poll.Related: Budget 2016 live: George Osborne to announce fresh austerity and school shakeup Continue reading...

Growth, borrowing, spending cuts, the jobs market and Brexit – what to look out for in George Osborne’s eighth budgetGeorge Osborne’s eighth budget is unlikely to be a radical affair, as the state of the public finances and the upcoming EU referendum limit the chancellor’s room for manoeuvre. This all but rules out big or controversial policy announcements (he has already decided not to press ahead with pension tax relief reform). But with the economy growing more slowly than expected and borrowing remaining high, the chancellor has already signalled further spending cuts of £4bn.We expect the Office for Budget Responsibility to cut its forecasts for growth by one or two 10ths. This, along with a poorer outturn for the current fiscal year, would push the deficit higher in the absence of further tightening measures.Downward revisions to growth seem likely. Chancellor Osborne will blame financial market wobbles and China’s slowdown, but the main problems are closer to home.Earnings growth has never really taken off post-crisis - so the cost of recession on earnings remains over £100/week pic.twitter.com/AVyPjVEL72Borrowing looks set to overshoot this fiscal year as a whole, and future years’ borrowing forecasts will be hit by the recent bout of global uncertainty (count the number of times “cocktail of risks” is mentioned ...) and slowdown in the domestic economy. Offsetting this to some degree will be lower debt interest forecasts due to lower expectations for gilt yields and Bank Rate.”These cuts will be contentious as they will take more demand out of the economy at a time when the economic backdrop is already very challenging. Further cuts would also present logistical problems: November’s comprehensive spending review put in place departmental budgets for the next four fiscal years, so these would need to be reopened.”In many respects, we see this budget as similar to a pre-election budget. Against the backdrop of evenly divided public and Conservative opinion over the EU referendum in June, we think that the chancellor and prime minister would likely prefer a ‘feelgood’ budget, and would probably choose to avoid any controversial decisions.”Economically, the emergency budget of 2010 was the most important one for the Conservative government. Politically, budget 2016 could be the most important one. Few days on the political calendar get more coverage than budget day ...[Osborne] will argue that the UK has a choice between a ‘certain’ new deal that improves the UK’s lot with the worst of austerity over, or, a choice with an uncertain long-term outcome that almost certainly damages the economy near term and sends progress on the public debt into reverse. This is powerful rhetoric to deliver on a key day and it won’t be an opportunity he’ll miss.” Continue reading...

Our guide to what it all means in the chancellor’s budgetDo you know your debt from your deficit? Your benefit cap from your universal credit? And what has Mr Micawber got to do with it all?

George Osborne eyeing cuts of £4bn but will plough on with pet projects including the academisation of all schoolsGeorge Osborne will announce fresh austerity measures on Wednesday as he delivers his eighth budget against the backdrop of a darkening economic outlook.

The easiest route for the chancellor will be to ladle out a few modest tax cuts paid for by stealth taxesBudgets have their own rhythm. Chancellors like to marry economics and politics and that means getting all the bad news out of the way early in a parliament so that there are goodies to be handed out when an election is looming.

George Osborne expected to announce funding in Wednesday’s budget, aimed at targeting ‘unacceptable’ growth in homelessnessGeorge Osborne is preparing to announce extra cash in Wednesday’s budget to tackle what he has called the “unacceptable” growth in homelessness.