A small upgrade to the OBR's wage-growth forecast on 28 October could add up to £9bn to the Chancellor's fiscal headroom, according to economists at Bloomberg Economics and Capital Economics, as summarised by the news site briefs.co.
That would be a possible boost to the £10bn to £12bn of headroom estimated in Thursday's Reuters poll of economists. It could reduce the need for large tax rises or spending curbs.
Ruth Gregory of Capital Economics says headroom would rise by £8bn if the OBR adopted her firm's pay profile. Dan Hanson of Bloomberg Economics says a modest tweak would ease the pressure on John Healey to "course correct" the deficit.
The OBR bases its forecast on a national accounts measure of pay growth, not Average Weekly Earnings. Briefs.co says higher borrowing costs linked to the Iran war have otherwise darkened the outlook.
These figures are economists' estimates. The OBR has not said whether it will revise its wage forecast, and it publishes its figures with the Budget on 28 October.