The Resolution Foundation says the Chancellor's £14.5bn of Budget headroom could turn into a £26bn deficit in 2029-30, and that energy prices are already close to the OBR's 'severe' scenario.
The think tank puts headroom against the current balance rule in 2029-30 at £14.5bn, down from £23.6bn in March. In its Budget-day press release it said that, given typical gaps between plans and outcomes outside major shocks, the budget "could turn out to be £26 billion in deficit in 2029-30".
It also said the rise in borrowing costs after the OBR closed its forecast implies about £2bn of extra debt interest on top of the OBR's revisions. It forecasts debt interest of £147bn, or 4.1% of GDP, in 2029-30. That is £13bn more than in March.
On 30 October the Resolution Foundation said gas prices on Budget day were far above the OBR's central forecast and close to its 'severe' shock scenario, with oil about two-thirds of the way there. It said the downside scenario "is starting to look like the central case". In that scenario inflation tops 5% next year.
These are the Resolution Foundation's estimates and have not been independently checked.