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The Institute for Fiscal Studies's initial response to Chancellor George Osborne's 2011 Budget statement:

Unlike George Osborne’s June 2010 Budget and October 2010 Spending Review, the 2011 Budget was not a big fiscal event. The net impact on the public finances of all announcements was minimal. The effective tightening over the next four years remains formidable.

But the fiscal forecasts have changed, and for the worse. Given the reductions in expected economic growth this year and next, that is not surprising. The Office for Budget Responsibility (OBR) was expecting total receipts to exceed non-investment spending by 0.3% of national income in 2015-16. It now expects a deficit of 0.2% of national income.

What has not changed, or hardly changed, on the official forecasts is the cyclically adjusted deficit – that is borrowing that is thought to be impervious to economic recovery. The OBR is still forecasting a cyclically adjusted current surplus of 0.4% of national income by 2014-15. The reason is that their estimates of potential output and potential growth have not changed.

Full press release