Looking for a giveaway from Sunak this week? Don’t hold your breath…

theguardian.com:

Poor old Rishi Sunak. Covid hit within weeks of him becoming chancellor. He thought he would now be in a position to start implementing the sorts of long-term policies aimed at stimulating growth and enterprise that he set out in his recent Mais lecture. Instead, he has to deal with a whole new crisis.

Inflation is heading to 8% and, according to the Bank of England, possibly considerably well beyond that. Combine that with earnings rising less quickly than prices, a big tax hike coming in next month, and benefits going up by only 3.1%, and you have the ingredients for the biggest year-on-year fall in household incomes in a generation. Even after the £9bn package that Sunak announced in February, people on average incomes could well be more than £800 worse-off next year than this.

There are suggestions circulating that Sunak has more money to play with than expected. Tax revenues have come in more strongly than forecast. This year’s deficit could well end up £25bn lower than forecast at the time of the October budget. With prices, and nominal earnings, rising faster than forecast, cash revenues will also be higher next year.

Nevertheless, the idea that the Treasury coffers are awash with cash is largely illusory.

First, debt interest payments will be a lot higher than forecast. Second, cash spending on benefits will be much higher than expected, at least from 2023, as inflation eventually feeds through into benefit levels. Third, real-terms growth will be less than forecast. We are worse off than we expected; that means there is less money to go around. And fourth, because inflation is so much higher, the real value of the cash spending plans for public services set out in October will be worth much less than intended. If