Key Takeaways 

  • The centrepiece of Chancellor Jeremy Hunt’s budget

    was a 2-pence cut in national insurance contributions.

    Alongside other smaller measures, this means

    roughly 0.3% of GDP per annum of fiscal loosening.

  • There were some modest offsetting tax-raising

    measures, including abolishing non-dom status. But

    net tax cuts were mostly funded by running down

    headroom against the fiscal rules to a wafer-thin £9bn.

  • The OBR’s growth forecasts were revised up and

    inflation forecasts down. This came with a sting in the

    tail for the chancellor by lowering forecast nominal

    GDP and therefore fiscal headroom a touch.

  • Planned real departmental spending growth was

    maintained at 1%. But future spending assumptions

    are not credible.

  • Other sensible measures announced yesterday

    include raising child benefit thresholds and an extra

    ISA allowance for UK equity investment. The OBR

    estimates that measures in the budget will boost

    growth by 0.3% per annum.

  • The broad focus on tax cuts may help boost support

    for the Conservatives from their core voters. But it is

    unlikely to fundamentally change the party’s political



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