1. What is the latest outlook for the economy?

At the start of the year, Rishi Sunak made ‘growing the economy’ one of his five pledges to the British people. In normal times, that would have been an unambitious aim, since the economy typically grows markedly from year to year.

But the economic situation has been far from normal and the forecast published by the Office for Budget Responsibility (OBR) alongside the budget just two months on from Sunak’s speech, in March, was gloomy. It expected the UK to narrowly avoid a recession in 2023, with relatively sluggish growth thereafter. 

Household incomes have been especially badly affected by the increase in energy costs over the past couple of years and the OBR expected real household disposable income per person (a measure of living standards) to still be below 2019 levels by 2028. And even these estimates come in the context of the OBR having been consistently more optimistic than some other forecasters – most notably the Bank of England, which anticipates even slower growth over the next few years.

Lots has since changed the chancellor's March budget, and the OBR’s new forecast will provide the latest official outlook for how the economy will evolve over the next few years. It is likely to show higher inflation and interest rates than it expected then, but other forecast changes are less certain. Will the OBR continue to be more optimistic than the Bank of England, or downgrade the outlook? And what will this mean for household incomes?