Paroxysms of glee among Labour’s many enemies greeted last week’s forecast of a £41.2bn black hole awaiting Rachel Reeves’s autumn budget, from influential thinktank the National Institute of Economic and Social Research (NIESR). Expect another three months of bone-rattling warnings about imminent tax raids crushing every family. She is in a doom loop; no way out; ha, ha, ha!
Voices in the Treasury sound sanguine, pointing out that NIESR has a record of eccentric forecasts. Before the spring statement, it predicted that Reeves needed £57bn just to keep her fiscal rules: actually, it was £4.1bn. For Jeremy Hunt as chancellor in 2023, it generously forecast he had £97.5bn to spend: on the day, that had shrunk to £6.5bn.
