Autumn Statement Predictions: 10 Things to Look out For

George Osborne’s Autumn Statement and spending review will seek to show the chancellor delivering a comprehensive plan to balance the books by 2020.
He needs to reshape the public sector and resolve his difficulties over plans to cut tax credits.

The statement is designed to restore his dented political credibility and is likely to have the following themes:

1. The economy has grown in line with the Office for Budget Responsibility’s July forecast, so there are few reasons for the fiscal watchdog to change the broad outlook. Inflation is lower than expected, raising the prospect that the cash size of the economy will expand less than the OBR thought. But productivity growth has recovered, removing one big risk to the forecast.

2. The public finances are still likely to show the public debt burden falling from this year on and recording a surplus by 2019-20, meeting Mr Osborne’s fiscal rules, but with a smaller margin for error than the £10bn he forecast in July. Lower interest rates reduce debt interest payments, offsetting weaker tax revenues and the addition of housing associations’ borrowing and debts to the books.

3. The spending review will remove 5 per cent of day-to-day public spending in real terms from government departments. Because health, schools, defence and overseas aid — three quarters of departmental spending — have some form of protection, unprotected departments face cuts of about 27 per cent. Police, justice and local government have most to fear.


Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.