The demand- and supply-side effects of policy measures
In each Economic and fiscal outlook we publish a box that summarises the effects of the Government’s new policy measures on our economy forecast. These include the overall effect of the package of measures and any specific effects of individual measures that we deem to be sufficiently material to have wider indirect effects on the economy. In our November 2022 Economic and fiscal outlook, we adjusted our economy forecast to take into account plans for the energy price guarantee (EPG) and consider the impact of tax and spending measures on the supply side of the economy.
Our economic and fiscal forecasts are conditioned on the latest announced Government policies. This always includes estimates of the direct fiscal costs or savings from policy measures and their near-term demand-side impacts on the economy. Where evidence suggests that measures will have a material, additional, and durable impact on potential output, we also take their supply-side impacts into account.a This box details our estimates of the demand and supply impact of policies announced since the Spring Statement in March.