228. BUDGET SPECIAL: Where's The Growth?

November 27, 2025·41 min·3 clips

The OBR accidentally published the entire budget an hour early, devastating Chancellor Rachel Reeves.

The budget lands messy. The first problem is not a spreadsheet line. It is the OBR publishing the material before Rachel Reeves had even begun, which turns the whole thing into politics before the economics has had a chance to settle. Reeves gets little cover from Peston and McGovern. They frame this as her second budget: smaller than last year's £40 billion tax package, but still loaded with £26 billion of increases that have to stand up to scrutiny. The leak matters because it feeds the bigger worry. Can the institutions, timing, and assumptions around this budget carry what is being piled onto them? Then comes the behavior problem. Salary sacrifice is due to change in 2029, with £4.7 billion expected by the end of the decade, but the hosts keep poking at the assumption behind that number. People may not sit still for it. The fintech example is blunt: clients looking at salary sacrifice are already saying they will put less into pensions. If that happens, the model may be booking money that never turns up. The ISA argument has the same wobble. Cutting what people can put into a cash ISA is meant to push them toward stocks and shares, but the response here is dry: they may just save less. That is where the budget starts to feel less solid. It books revenue from people not changing their behavior, while also hoping they change their behavior somewhere else. Richard Hughes is one of the useful reference points. Peston says Hughes warned that many of the tax reforms are complicated and may not raise what the government wants. Even the headroom is not exactly comforting. The doubled cushion is meant to protect the chancellor from shocks, but the cited probability is only around 58 or 59 percent. By the end, the smorgasbord joke about stinky fish has a point. Some measures may smell fine on the table and go bad under pressure.

As heard by us

A dry Budget-night debrief on tax rises, uncertain costings, and the OBR's early release.

Budget night gives this episode its sharpest edge. Rachel Reeves's second budget is treated as another major set piece, with 26 billion in tax rises after last year's 40 billion.

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Why you'd press play

You want the Budget decoded without the Westminster fog.

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