Tomorrow, the UK Chancellor of the Exchequer will deliver the UK government’s Autumn Statement.
We’re often asked what the Autumn Statement is and how it differs to the Budget? The Budget (usually held in the early Spring) comes at the start of the UK’s fiscal year, which runs from April to March. Budgets set the overall shape of fiscal policy, perhaps for several years to come as we saw in June 2010, and would be the place for major tax and spending reforms. For the Autumn Statement, think more mid-term report and a chance to tweak policy or consult ahead of the next Budget. Between them, they are the two regular parliamentary events on the UK government’s economic policy-making calendar.
The Autumn Statement does not have quite the same grand history as the Budget. Its genesis lies in the 1975 Industry Act which required the government to provide two economic forecasts a year and the first Autumn Statement was delivered in December 1976 by then Chancellor Dennis Healey. Since then, (baring a brief hiatus for unified-Budgets and Summer Economic Forecasts) it has taken differing forms including being known as The Pre-Budget Report under the previous UK government, but its purpose has remained broadly the same.
So what will the Chancellor announce? We’ll have to wait until tomorrow for the full details, but the Chancellor will update Parliament on the state of the UK economy and public finances. His statement will be based on the official forecasts published by the independent Office of Budget Responsibility (OBR). The OBR – set up by the UK government – is charged with preparing forecasts, costing government policies (similar to the Congressional Budget Office and Joint Committee on Taxation in the US) and assessing whether the government is likely to meet its fiscal mandate. It does all this independent of the influence of government ministers.
Back in March, the OBR expected that UK GDP would grow by 0.6 per cent in 2013, before growth picked-up to 1.8 per cent in 2014 and 2.3 per cent in 2015. Since then the Office for National Statistics have published estimates of GDP growth in the second and third quarters of this year (2.8 per cent and 3.2 per cent respectively, on an annualised basis), as well as updated data on employment and unemployment, inflation and other economic indicators. Other forecasters such as the IMF and the OECD have revised up their UK growth forecasts since then.
You can watch the Chancellor’s statement live at 6.15am (EST). But parliamentary traditions are perhaps even better once you’ve had a chance to eat breakfast. And they work well with more modern forms of media, so we’ll be highlighting some key details via Twitter through Thursday morning.