Overview

• The OBR will deliver new five‑year projections this week, with analysts expecting about a 0.2 percentage‑point annual downgrade to productivity and growth that could cut receipts by nearly £20bn a year.
• Rising gilt yields have pushed the average rate on new government debt to a 17‑year high, with economists estimating an extra £4–5bn hit to the public finances.
• Economists say the projected shortfall could force up to £40bn in tax rises or spending cuts in the 26 November Budget to preserve the Chancellor’s limited headroom under her fiscal rules.
• Reports say the Chancellor is considering dropping the OBR’s spring forecast to move to one fiscal event a year, a step OBR chief Richard Hughes opposes as a blow to transparency.
• Recent policy reversals on winter fuel payments and disability benefits add roughly £6bn a year to pressures, while choices on the two‑child benefits cap and fuel duty remain under review.