Skip to main content

How much fiscal ‘headroom’ will the next government have?

If the polls are correct and Labour wins the election, the policies it implements and when it implements them will depend in part on the ‘headroom’ against the fiscal rules it is given by the Office for Budget Responsibility (OBR). We suspect the next government may be handed a bit more headroom by the OBR, perhaps £16bn (0.6% of GDP), up from £8.9bn (0.3% of GDP) at the March Budget. That would allow it to reverse some of the scheduled spending restraint, or the freeze on personal tax thresholds, but not both.

We’ll be discussing the outcome of the UK general election in a 20-minute online briefing at 9.30am BST on Friday 5th July. (Register here.)

Become a client to read more

This is premium content that requires an active Capital Economics subscription to view.

Already have an account?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to gain:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services

Get access