When a Chancellor delivers his Budget, the question people naturally ask is ‘why does this matter for me’. Often that means looking out for the newly announced tax and spending measures. For some, the policy measures announced in November, for example, the removal of stamp duty land tax (SDLT) for most first-time house buyers, or another year of fuel duties being frozen in cash terms, will be fairly significant.

However, for most it will have been the new economic forecasts, considerably more pessimistic than at the March Budget, that will have the largest material impact. These forecasts downgraded the outlook for productivity, the main driver of economic growth, over the next few years. Slower productivity growth means, on average, slower wage growth, which in turn depresses government revenues.