Darshini David
Economics Deputy Editor

Is it safe, but for how long?

The Chancellor was relieved as official forecasts suggest he is still on track to meet his key fiscal targets, with slightly more headroom left than previously thought.

The impact of weaker-than-expected growth on the fiscal outlook has been more than offset by lower borrowing costs, higher stock prices, and higher taxes.

But the margin of safety by which her revenue is expected to exceed day-to-day public spending in the coming years is just under £24bn, still smaller than the historical average.

And the OBR was mindful of tensions within the Middle East building when finalizing its forecast. It then expanded explosively. Investors may have been watching energy market fluctuations more closely than the prime minister.

It is highly uncertain how long energy price fluctuations will continue. But economists are already speculating that if it is retained, the chancellor will struggle to remove the fuel duty freeze by at least the Budget.

Add in the risks of inflation, rising interest rates, and a decline in economic activity and margins, and you may not have much headroom.

That may not happen, but as the OBR flag indicates, there are other risks, including increased pressure on defense, health and migrant housing costs this year alone.

OBR is paid to be careful. But that means that even when the autumn budget arrives, changes to taxes and spending may still be needed given the overall budget.