Healey buys himself some time, but big questions unanswered

So the chancellor appears to have bought himself some breathing space. But that means some big questions have been postponed until another day, not least on public services.

Higher-than-expected inflation may mean that if areas such as health and defence are prioritised, budgets for some other “unprotected” areas – justice and higher education for example – are set to lag behind inflation after 2028.

There was a hint too from John Healey that he’d tap into some of those budgets to help out defence spending. To maintain those budgets in 2030 would means finding tens of billions of pounds.

And issues around the other big area of spending – welfare – remain unresolved. Between 2025 and 2032, spending there is set to increase by £100bn.

The official forecasters also noted the rapid rise in sickness and disability caseloads since the start of the pandemic. They warn if that trend continued, spending on such benefits would rise by a further £13bn.

Any suggestion of welfare reform has been postponed until the forthcoming review into the plight of workless young people.

Then there’s the issue of boosting growth. There was a bit more detail on the plans for devolution – but there is much to be fleshed out.

And on another key part of the growth strategy, housebuilding, there was disappointing news. Even though first-time buyers are set to get more help, their first home may be more elusive.

Between regulation and higher costs – in part, related to the war – the OBR estimates that 190,000 fewer homes will be built by 2032 compared to what it thought in March, a significant setback.

So the chancellor may have unveiled 98 (relatively small) measures but the to-do list gets longer.

With his official forecasters warning that, in a very uncertain world, his finances face exceptional risks, playing a wait-and-see game feels like a prudent move.

The risks go both ways: the OBR points out that a swift resolution to the war and an improvement in the economy could spell a significant boost to the public finances.

So the chancellor has more reason than most to keep his fingers crossed that happens rapidly.

For as it stands, the official forecasters say incomes after inflation, living standards, are set to be only 1% higher at the end of the decade than at the start.

A series of economic shocks outside out control could thwart plans to turbo-boost prosperity . And as today shows, breathing space only extends so far.