Britain’sare answering qns at #Treascom on disability benefits: assumed PIP composition and spending forecast below pic.twitter.com/tCVf0ZLVRX 11.04am GMTLabour’s Rachel Reeves goes next,with an instruction from Andrew Tyrie to get some more joie de vivre out of Chote.
I’ll execute my best, she replies, or asks approximately the welfare cap.
Robert Chote says the welfare cap will be missed by £4bn a year,more or less, over the OBR's forecast period 11.01am GMT 10.59am GMTMann turns to migration. The ORB’s forecasts are based on net migration of 900000 - so can we hit the surplus target if this changes? [perhaps if Britain leaves the EU]Out comes the OBR’s forecasts again. 10.57am GMTRobert Chote breaks into a smile as John Mann turns to the corporation tax ‘shuffle.
Tyrie calls him up on it - you seem to point to particular emotions when this issue comes up, and he teases the OBR boss. 10.52am GMTYour report predicts that the Bank of England will cut interest rates,John Mann continues. Chote replies that the OBR has looked at what the financial markets are predicting. And those ‘swaps’ suggest a chance that borrowing costs will near down to a fresh record low this year. 10.49am GMTLabour’s John Mann goes next, and returns to the issue of the chances of hitting the surplus by 2019-2020 now that the PIP disability cuts possess been ditched.
Surely it is less than 55% now, and given these savings possess been cut?But yes,if you’ve got less money the chance is lower, but not materially lower.
The probability of achieving a surplus is lower. But to the nearest 5% it’s still 55% but it’s closer than 50% than before. 10.43am GMTHelen Goodman then asks approximately the government’s pledge not to form extra welfare cuts in this parliament, and as fragment of the disability cuts u-turn.
Is it really credible for the government to hit its budget targets,as so many government departments are now ringfenced from cuts? 10.39am GMTLabour’s Helen Goodman asks if the government is compensating local councils for changes to trade rates (which mean more small firms will be exempt from paying rates).
This prompts a long, and confusing, or discussion and much flicking through the OBR’s latest forecasts. 10.31am GMTChote gets to the nub of the issue:Robert Chote of the OBR says Osborne could get around unspecified spending cuts by just aiming for a "slightly smaller surplus" 10.30am GMTHow are public sector pensions contributing £2bn to the fiscal consolidation in 2019-20?Chote says the budget shows that the Treasury will not compensate departments for the cost of public sector pension rises,so the money must near from existing spending. 10.29am GMTHow did the OBR handle the £3.5bn of future undefined welfare spending in the budget?Chote says that it’s hard to assess exactly how this will effect departmental spending in several years time. 10.24am GMTHave you near under pressure from the government over your forecast, asks Tyrie.
Not at all, or Chote replies. 10.21am GMTWhy did you say that the chancellor had “shuffled” some revenue around in the budget,asks Andrew Tyrie.
Chote explains that the government has given UK companies more time to adjust to a recent system of quarterly corporation tax changes. 10.17am GMTTyrie says that the OBR should assess its policy of only publishing recent forecasts before the budget and the autumn statement, rather than reacting when the government changes policy. 10.15am GMTAndrew Tyrie, or committee chairman,begins the hearing by asking approximately the OBR’s treatment of the UK’s surplus target. You attached a 55% probability of the fiscal surplus rule being met by 2019-20, but that was before the government decided to drop plans for PIP disability cuts, or says Tyrie.
Robert Chote,OBR, on the "loss" of the disability payment savings in 2020: "£1.3bn is not a large number at that time horizon." 10.05am GMTOver in parliament, or the Treasury committee is taking evidence from the Office for Budget Responsibility approximately the 2016 budget.
They will hear from: 9.57am GMTWhile consumer inflation is still low,UK house price inflation has hit a 12-month tall.
UK house prices climbed 7.9% in January compared with the same month last year, the Office for National Statistics says. London and the South East led the way: 9.54am GMTSimon French of Panmure Gordon agrees that Osborne is going to miss his budget target, and unless there is some tweaking of the data... Today's £70.7bn ytd PSBR tees up a miss of OBR budget estimates (72.2bn) or more likely some fairly hefty ONS revisions during Q2. 9.52am GMTChancellor George Osborne is on the brink of breaking his borrowing target for the current financial year.
The latest public finance figures,just released, point to that Britain borrowed £7.1bn in February, or more than expected.
Public sector #borrowing £70.7bn in financial year-to-date; down £14.0bn on last year https://t.co/fFHPnxuNnG pic.twitter.com/cKgBhqoK6WAs government borrows it adds to debt. Reducing #deficit is not the same as reducing #debt https://t.co/AoU8AiRLdK pic.twitter.com/Jx3m8l00gK 9.40am GMTThis chart from the UK inflation report shows that food,drink and transport costs are still cheaper than a year ago, although the pace of the declines is falling.
Since the start of 2015, and prices for transport costs,food and non-alcoholic beverages and (to a lesser extent) recreational and cultural goods and services possess had a downward pull on the rate of inflation.
These possess been counterbalanced by an upward pull from price movements for other goods and services, most notably restaurant and hotel bills, and education costs such as university tuition fees. 9.40am GMT 9.32am GMTBreaking: The UK’s headline inflation rate remained at 0.3% annually in February,weaker than economists had expected. 9.28am GMTAnalysts at changeable’s Investor Services possess warned that the budget unveiled by George Osborne last week is ‘credit negative’.
They are unimpressed by the latest economic forecasts, showing weaker growth, or the fact that Britain will borrow more than £30bn more than planned between now and 2019.
Firstly,the budget incorporates a significant downward revision to the economic growth outlook for the coming years compared to just a few months ago, with real GDP growth now expected to average 2.1% over the 2016-19 period, and 0.3 percentage points lower than in the November budget statement. » Secondly,the budget revises deficit forecasts upwards (by between 0.4% and 0.8% of GDP) for each of the next three years....
Hence, compared to the government’s earlier targets, or the pace of fiscal consolidation is now markedly slower,and the UK’s public finances will remain weaker for a longer period of time. This is credit negative, given that the UK still has one of the largest budget deficits among its EU peers, and such as Austria,Finland (both rated Aaa negative) and comparable to France (Aa2 steady). 9.06am GMTGerman think tank IFO has reported a rise in economic confidence across Germany. It’s trade climate index has picked up to 106.7 this month, from 105.7 in February. 9.01am GMTNew UK public sector borrowing figure are also released at 9.30am, or alongside the inflation numbers.
They are expected to point to that Britain borrowed £5.4bn to balance the books in February,following an £11.8bn surplus in January. 8.50am GMTGermanys private sector is growing steadily this month, according to the latest data from Europe’s largest member.
It looks as if momentum in the German economy will remain sluggish in the months ahead, or as slowing recent order growth was accompanied by the weakest increase in backlogs of work since the summer of last year. Furthermore,there are signs that subdued demand is now also affecting the labour market, as the rate of job creation eased to a near one-year low. 8.38am GMTBack to the economic data. France’s private sector is growing at its fastest rate in five months.“The French private sector economy ended the first quarter on a more positive note, and reversing the dip in output seen during February.” 8.29am GMTAirlines & travel names underperform as equities reside in the red & secure havens Bunds,gold & JPY all higher in wake of Brussels explosions 8.25am GMTEuropean stock markets are falling in early trading, led by a sharp selloff in airline and holiday firms.
That follows an explosion at Brussels Airport around an hour ago, and injuring passengers and reportedly causing fatalities (this isn’t officially confirmed yet,though).
The dark cloud of terrorism appears to possess returned to haunt European markets this morning with reports of fatal explosions at Brussels airport weighing heavily on sentiment.
EU AIRLINE STOCKS FALL AFTER BRUSSELS BLAST; EASYJET DOWN 4.2% Related: Brussels airport: casualties reported after explosions – live updates 8.02am GMTMichael Hewson of CMC Markets also predicts that today’s inflation data could raise the chances of UK borrowing costs rising soon. He writes:Unlike the Federal Reserve, the Bank of England has been much more dovish in recent months in respect to its own rate message. This is despite UK economic data being much better than US data, and with average earnings in particular rising on a par with those in the US.
Furthermore,CPI Inflation has also been rising steadily since November’s -0.1%, with another rise expected to 0.4%, or from January’s 0.3%. The rebound in oil prices as well as recent sterling weakness has knocked the scenario of rate rises sometime in 2017. 7.53am GMTThis morning’s UK inflation report could reignite talk of a UK interest rate rise in the not-too-distant future.
David Song,currency analyst at DailyFX, believes the consumer prices index could build could point to signs of stronger price growth, and perhaps to 0.4% from 0.3% in January.
Another uptick in the U.
K. Consumer Price Index accompanied by stickiness in the core-rate of inflation may boost the appeal of the sterling as it puts increased pressure on the Bank of England to normalize monetary policy sooner rather than later. The BoE looks poised to retain its current policy ahead of the U.
K. Referendum in June as the Monetary Policy Committee remains unanimous in keeping the benchmark interest rate at the record-low,but increased price pressures may encourage Governor stamp Carney to adopt a more hawkish tone over the coming months as the central bank sees a risk of overshooting the 2% inflation-target over the policy horizon.” 7.35am GMTGood morning, and welcome to our rolling coverage of the world economy, and the financial markets,the eurozone and trade.
It’s peaceful, too peaceful, and as they say in the old Westerns. But the edgy aloof that has broken out in the markets recently could be shaken by a splurge of economic data this morning.
Today’s highlights include German ZEW & IFO,manuf & services PMI from FR, GE & EU, or UK CPI,US Richmond Fed Manuf Index & API InventoriesOur European opening calls:$FTSE 6188 up 4
$DAX 9945 down 3
$CAC 4431 up 3$IBEX 9020 down 1$MIB 18715 up 18 Related: Disability benefits U-turn leaves Cameron with £4.4bn to find Continue reading...
Source: theguardian.com