diff --git a/changelog.d/update-obr-march-2026.changed.md b/changelog.d/update-obr-march-2026.changed.md new file mode 100644 index 000000000..65a29c194 --- /dev/null +++ b/changelog.d/update-obr-march-2026.changed.md @@ -0,0 +1 @@ +Update OBR economic forecasts to March 2026 EFO. diff --git a/policyengine_uk/parameters/gov/economic_assumptions/yoy_growth.yaml b/policyengine_uk/parameters/gov/economic_assumptions/yoy_growth.yaml index 866c927de..294d5796e 100644 --- a/policyengine_uk/parameters/gov/economic_assumptions/yoy_growth.yaml +++ b/policyengine_uk/parameters/gov/economic_assumptions/yoy_growth.yaml @@ -2,7 +2,7 @@ # # Data sources: # - 2009-2024: OBR outturn data from detailed forecast tables -# - 2025-2030: OBR forecast from latest Economic and Fiscal Outlook (EFO) +# - 2025-2030: OBR forecast from latest Economic and Fiscal Outlook (EFO, March 2026) # - 2031+: OBR long-run equilibrium assumptions: # - CPI: 2.0% (Bank of England target) # - RPI/CPIH: ~2.4% (CPI + 0.4pp wedge, reflecting housing costs growth) @@ -33,12 +33,12 @@ obr: 2023-01-01: 0.0969 2024-01-01: 0.0359 # Forecast (2025-2030) - 2025-01-01: 0.0433 - 2026-01-01: 0.0371 - 2027-01-01: 0.0313 - 2028-01-01: 0.0287 - 2029-01-01: 0.0291 - 2030-01-01: 0.0231 + 2025-01-01: 0.041 + 2026-01-01: 0.031 + 2027-01-01: 0.030 + 2028-01-01: 0.028 + 2029-01-01: 0.029 + 2030-01-01: 0.023 # Long-run assumptions (2031+) 2031-01-01: 0.0230 2032-01-01: 0.0237 @@ -87,8 +87,8 @@ obr: unit: /1 label: Retail price index growth reference: - - title: OBR EFO November 2025 (detailed forecast tables, economy, Table 1.7) - href: https://obr.uk/efo/economic-and-fiscal-outlook-november-2025/ + - title: OBR EFO March 2026 (Table A.1) + href: https://obr.uk/efo/economic-and-fiscal-outlook-march-2026/ - title: OBR long-run RPI-CPI wedge methodology (2031+ values derived from this) href: https://obr.uk/box/the-long-run-difference-between-rpi-and-cpi-inflation/ average_earnings: @@ -110,14 +110,14 @@ obr: 2021-01-01: 0.059 2022-01-01: 0.0614 2023-01-01: 0.0622 - 2024-01-01: 0.0493 + 2024-01-01: 0.051 # Forecast (2025-2030) - 2025-01-01: 0.0517 - 2026-01-01: 0.0333 - 2027-01-01: 0.0225 - 2028-01-01: 0.0210 - 2029-01-01: 0.0221 - 2030-01-01: 0.0232 + 2025-01-01: 0.053 + 2026-01-01: 0.034 + 2027-01-01: 0.024 + 2028-01-01: 0.021 + 2029-01-01: 0.022 + 2030-01-01: 0.024 # Long-run assumptions (2031+) 2031-01-01: 0.0332 2032-01-01: 0.0371 @@ -166,9 +166,9 @@ obr: unit: /1 label: Average earnings growth reference: - - title: OBR EFO November 2025 (detailed forecast tables, economy, Table 1.6) - href: https://obr.uk/efo/economic-and-fiscal-outlook-november-2025/ - - title: OBR long-run economic methodology (2031+ values derived from this) + - title: OBR EFO March 2026 (Table A.1) + href: https://obr.uk/efo/economic-and-fiscal-outlook-march-2026/ + - title: OBR long-run economic methodology (2031+ values derived from this, unchanged from November 2025) href: https://obr.uk/forecasts-in-depth/the-economy-forecast/potential-output-and-the-output-gap/ consumer_price_index: @@ -190,14 +190,14 @@ obr: 2021-01-01: 0.04 2022-01-01: 0.0907 2023-01-01: 0.0730 - 2024-01-01: 0.0253 + 2024-01-01: 0.025 # Forecast (2025-2030) - 2025-01-01: 0.0345 - 2026-01-01: 0.0248 - 2027-01-01: 0.0202 - 2028-01-01: 0.0204 - 2029-01-01: 0.0204 - 2030-01-01: 0.0200 + 2025-01-01: 0.034 + 2026-01-01: 0.023 + 2027-01-01: 0.020 + 2028-01-01: 0.020 + 2029-01-01: 0.020 + 2030-01-01: 0.020 # Long-run assumptions (2031+): Bank of England 2% target 2031-01-01: 0.0200 2032-01-01: 0.0200 @@ -246,8 +246,8 @@ obr: unit: /1 label: Consumer price index growth reference: - - title: OBR EFO November 2025 (detailed forecast tables, economy, Table 1.7) - href: https://obr.uk/efo/economic-and-fiscal-outlook-november-2025/ + - title: OBR EFO March 2026 (Table A.1) + href: https://obr.uk/efo/economic-and-fiscal-outlook-march-2026/ - title: Bank of England inflation target (2031+ assumes 2% target) href: https://www.bankofengland.co.uk/monetary-policy/inflation @@ -427,19 +427,19 @@ obr: 2022-01-01: 0.1019 2023-01-01: 0.0532 2024-01-01: 0.0372 - # Forecast (2025-2030) from OBR EFO November 2025, Table 1.4 minus population growth - 2025-01-01: 0.0418 - 2026-01-01: 0.0327 - 2027-01-01: 0.0326 - 2028-01-01: 0.0302 - 2029-01-01: 0.0294 - 2030-01-01: 0.0306 + # Forecast (2025-2030) from OBR EFO March 2026, Table A.1 nominal GDP minus population growth + 2025-01-01: 0.0438 + 2026-01-01: 0.0292 + 2027-01-01: 0.0323 + 2028-01-01: 0.0310 + 2029-01-01: 0.0296 + 2030-01-01: 0.0315 metadata: unit: /1 label: Per capita GDP growth reference: - - title: OBR EFO November 2025 (detailed forecast tables, economy, Table 1.4) - href: https://obr.uk/efo/economic-and-fiscal-outlook-november-2025/ + - title: OBR EFO March 2026 (Table A.1, nominal GDP minus population growth) + href: https://obr.uk/efo/economic-and-fiscal-outlook-march-2026/ mixed_income: description: Per capita mixed income year-on-year growth. @@ -492,20 +492,20 @@ obr: 2021-01-01: 0.082 2022-01-01: 0.0926 2023-01-01: 0.0036 - 2024-01-01: 0.0083 + 2024-01-01: 0.007 # Forecast (2025-2030) - 2025-01-01: 0.0294 - 2026-01-01: 0.0222 - 2027-01-01: 0.0279 - 2028-01-01: 0.0272 - 2029-01-01: 0.0257 - 2030-01-01: 0.0242 + 2025-01-01: 0.028 + 2026-01-01: 0.024 + 2027-01-01: 0.029 + 2028-01-01: 0.027 + 2029-01-01: 0.026 + 2030-01-01: 0.024 metadata: unit: /1 label: House prices growth reference: - - title: OBR EFO November 2025 (detailed forecast tables, economy, Table 1.16) - href: https://obr.uk/efo/economic-and-fiscal-outlook-november-2025/ + - title: OBR EFO March 2026 (Table A.1) + href: https://obr.uk/efo/economic-and-fiscal-outlook-march-2026/ mortgage_interest: description: Mortgage interest year-on-year growth. @@ -538,8 +538,8 @@ obr: 2024-01-01: 0.083 # Forecast (2025-2030): Derived from CPI+1%, one year lagged 2025-01-01: 0.035 - 2026-01-01: 0.045 - 2027-01-01: 0.035 + 2026-01-01: 0.044 + 2027-01-01: 0.033 2028-01-01: 0.030 2029-01-01: 0.030 2030-01-01: 0.030 @@ -547,8 +547,8 @@ obr: unit: /1 label: Social rent growth reference: - - title: OBR EFO November 2025 (derived from CPI+1%, one year lagged) - href: https://obr.uk/efo/economic-and-fiscal-outlook-november-2025/ + - title: OBR EFO March 2026 (derived from CPI+1%, one year lagged) + href: https://obr.uk/efo/economic-and-fiscal-outlook-march-2026/ rent: description: Rent year-on-year growth, private and social (ONS series D7GQ). values: diff --git a/policyengine_uk/tests/policy/baseline/gov/dfe/extended_childcare_entitlement/extended_childcare_entitlement.yaml b/policyengine_uk/tests/policy/baseline/gov/dfe/extended_childcare_entitlement/extended_childcare_entitlement.yaml index 6aea879b3..70a84c567 100644 --- a/policyengine_uk/tests/policy/baseline/gov/dfe/extended_childcare_entitlement/extended_childcare_entitlement.yaml +++ b/policyengine_uk/tests/policy/baseline/gov/dfe/extended_childcare_entitlement/extended_childcare_entitlement.yaml @@ -203,7 +203,7 @@ members: [child1] extended_childcare_entitlement_eligible: true output: - extended_childcare_entitlement: 10011.897 + extended_childcare_entitlement: 10004.133 - name: Eligible for 30 hours - Family with multiple 2-year-olds after expansion period: 2026 @@ -219,4 +219,4 @@ members: [child1, child2] extended_childcare_entitlement_eligible: true output: - extended_childcare_entitlement: 17121.797 \ No newline at end of file + extended_childcare_entitlement: 17108.518 \ No newline at end of file diff --git a/policyengine_uk/tests/policy/baseline/gov/hmrc/student_loans/student_loan_interest_rate.yaml b/policyengine_uk/tests/policy/baseline/gov/hmrc/student_loans/student_loan_interest_rate.yaml index 861280d01..0b446bb98 100644 --- a/policyengine_uk/tests/policy/baseline/gov/hmrc/student_loans/student_loan_interest_rate.yaml +++ b/policyengine_uk/tests/policy/baseline/gov/hmrc/student_loans/student_loan_interest_rate.yaml @@ -148,6 +148,6 @@ employment_income: 30_000 student_loan_plan: POSTGRADUATE output: - # Postgraduate threshold ~£21,909 (uprated from £21,000) - # 6% of (30,000 - 21,909) = 6% of 8,091 = ~485 - student_loan_repayment: 485 + # Postgraduate threshold ~£21,861 (uprated from £21,000 by RPI) + # 6% of (30,000 - 21,861) = 6% of 8,139 = ~488.34 + student_loan_repayment: 488.339 diff --git a/policyengine_uk/tests/policy/baseline/gov/hmrc/student_loans/student_loan_repayment.yaml b/policyengine_uk/tests/policy/baseline/gov/hmrc/student_loans/student_loan_repayment.yaml index fa2f44c76..1fb8b1505 100644 --- a/policyengine_uk/tests/policy/baseline/gov/hmrc/student_loans/student_loan_repayment.yaml +++ b/policyengine_uk/tests/policy/baseline/gov/hmrc/student_loans/student_loan_repayment.yaml @@ -116,8 +116,8 @@ student_loan_plan: PLAN_2 output: # Threshold resumes RPI uprating from 2030 - # 9% of (40,000 - ~30,064) = 9% of ~9,936 = ~894.26 - student_loan_repayment: 894.26 + # 9% of (40,000 - ~30,061) = 9% of ~9,939 = ~894.52 + student_loan_repayment: 894.522 - name: Plan 2 - Income just below 2027 threshold period: 2027 diff --git a/policyengine_uk/tests/policy/baseline/gov/social_security_scotland/two_child_limit_payment.yaml b/policyengine_uk/tests/policy/baseline/gov/social_security_scotland/two_child_limit_payment.yaml index 0a86c0d90..0bf7a0f97 100644 --- a/policyengine_uk/tests/policy/baseline/gov/social_security_scotland/two_child_limit_payment.yaml +++ b/policyengine_uk/tests/policy/baseline/gov/social_security_scotland/two_child_limit_payment.yaml @@ -347,4 +347,4 @@ region: SCOTLAND output: # Payment continues as two-child limit still in effect - two_child_limit_payment: 3635 + two_child_limit_payment: 3633.188