Closing summary • Lowest earners hit as welfare squeezed
• UK to miss debt target
• Highlights from 12.30pm
• The Treasury view...and the Labour line
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guardian.co.uk, Wednesday 5 December 2012 18.37 GMT
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The chancellor, George Osborne, delivers his autumn statement today. Photograph: PA Sort by:
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7.58am GMT
George Osborne to deliver autumn statement
The chancellor, George Osborne. Photograph: Peter Macdiarmid/Getty Images There are 'no miracle cures' to the UK's economic strife.
That's how George Osborne will defend today's autumn statement when he stands up in the House of Commons at 12.30pm.
The chancellor is expected to admit that the British economy is in a much worse state than predicted in March's budget. With the Office for Budget Responsibility likely to cut its growth forecasts, Osborne may have to admit that his debt and deficit reduction plans are off track.
Some of the details have been leaked already – we know that Osborne is planning a £5bn infrastructure spending plan, financed by deeper cuts across Whitehall. A headline-friendly clampdown on tax-avoiding multinational companies is also in the works. And welfare cuts and a tax raid on the wealthy could allow Osborne to claim that the country is sharing the pain.
But for the chancellor who pledged to deal "decisively with our country's record debts" in his first budget statement in June 2010, today is likely to be a difficult end to a tricky year.
We'll bring you the build-up, the statement itself, full reaction and detailed analysis through the day.
We're both writing the blog. If a post has AS at the end, it's from Andrew Sparrow, and if it has GW, it's from Graeme Wearden. If it doesn't have initials at the end, that's either because we both contributed - or because it's not particularly relevant.
Updated at 1.33pm GMT
8.18am GMT
Osborne to say 'we're confronting Britain's problems'
We're expecting George Osborne to take a defiant line in today's statement, saying:
In this autumn statement, we show that this coalition government is confronting the country's problems, instead of ducking them. The public know that there are no miracle cures. Just the hard work of dealing with our deficit and ensuring Britain wins the global race.
That's from the Guardian's front page story, which reveals that the government also stands accused of cutting NHS spending in England, having repeatedly said it is rising in real terms.
Updated at 8.48am GMT
8.45am GMT
Autumn statement - politics
We're going to get hundreds of charts and figures today, but, for my money, the most interesting autumn statement-related figures are the one on page 13 of this chart (pdf). It's the YouGov tracker showing which party is seen as best at handling various issues, and page 13 shows who is ahead on the economy. For most of 2010 the Conservatives had a double-digit lead over Labour. At the start of December the Conservatives were still ahead, but just by one point. This indicator is one of the better guides as to who is going to win the general election, and if the Conservatives lose their lead here by 2015, then Labour must be almost home and dry.
It's surprising that Labour is not ahead already because, at face value, George Osborne's economic record has been woeful. Growth has been feeble, we've had a double dip recession and there is still the chance of a third. He's got two fiscal rules, and he is expect to admit today that he is going to break at least one of them. Austerity is being extended, some taxes are going up and, as the Guardian reveals today in its splash, the party that promised in 2010 to cut the deficit but not the NHS is actually doing the opposite.
But Osborne has managed to retain his lead over Ed Balls on economic competence because the Conservatives have successfully managed to persuade a chunk of the electorate that, if the economy is in a mess, it's more Labour's fault than the government's. A similar thing happened in reverse in the 1990s and, in his recent biography of Osborne, Janan Ganesh says this has a profound effect on his outlook.
[Obsorne] does not scar easily, but he learns rapidly. For him, the lessons of the Major years was the primacy of politics over policy. After all, by any reasonable standard, Major led one of them more effective post-war governments. The first five years of what would turn out to be a fifteen-year economic boom took place under his premiership. The British curse of inflation was finally exorcised. Crime ... began to fall ...
Yet, for all this, Major's reward was the largest defeat endured by any party during this lifetime. His shrewd judgment and quiet competence ... mattered less than his party's repellent reputation.
When Osborne spills out the bad news today, will the public conclude that he has lost all credibility? Or can he continue to persuade the public that he's doing his best in appalling circumstances and that Labour would be worse? That's the big political challenge for him for today, but also for the rest of this parliament. AS
Updated at 12.57pm GMT
8.51am GMT
Autumn statement - economics
The main economic news will come early in the statement, when George Osborne presents the latest official forecasts for the public finances.
The Office for Budget Responsibility is widely expected to slash its forecasts for UK economic growth, which would push up UK's borrowing requirements (to compensate for the resulting lower tax receipts).
The key question is whether the chancellor will admit that he is now on track to miss his two fiscal goals – for national debt to be falling as a proportion of GDP by the 2015/2016 financial year, and to eliminate the structural deficit on a rolling basis over five years.
Some City economists believe both goals could be missed.
The UK's cost of borrowing remains close to record lows today (10-year gilts are changing hands at an interest rate of just 1.83% this morning), so we aren't to be locked out of the markets (Britain, as they say, is not Greece).
But the prized AAA credit rating is already looking tarnished, and a particularly bleak set of forecasts could bring the dreaded downgrade closer.
Kit Juckes, global strategist at Société Générale, turns to Shakespeare to explain the mood in the Square Mile today:
"A sad tale's best for winter: I have one of sprites and goblins". And of Osbornes and triple-As too.
Welcome to UK (snowy) Autumn Statement Day. The UK has been a leading proponent of using super-easy monetary policy and devaluation as a strategy to offset fiscal austerity in the post-crash world.
Today's Autumn Statement won't be an admission of failure, but lower OBR growth forecasts, acknowledgement that debt level targets will be missed and another hotch-potch of tax and spending measures will reflect the lack of progress. The rating goblins will be sharpening their swords, no doubt, and the sterling bears will prowl the woods.
For the record, in March the OBR predicted the UK would grow by 0.8% in 2012, 2.0% in 2013 and 2.7% growth in 2014. GW
Updated at 9.03am GMT
9.09am GMT
This is interesting.
Prayer cards are the cards that MPs use to reserve a seat in the chamber. They enable MPs to get a seat for prayers, which take place, in private, before the start of Commons business every day. AS
9.25am GMT
What we expect today
Thanks to a torrent of leaks in recent days we have a decent idea about what to expect in today's statement. They include:
• Pensions: a tax raid on wealthier people, either by cutting the tax-exemption threshold (currently £50,000 per year) by as much as a third, or by cutting pension tax relief levels. That could raise €2bn
• Mansion tax. Or a 'son of mansion tax', as Westminster insiders describe it. Not Vince Cable's dream of a levy on all homes worth more than £2m, but just on those owned by "non-doms" – super-rich from overseas.
• A crackdown on tax avoidance. The public accounts committee tee'd the ball up for Osborne on Monday with a blistering attack on Starbucks, Amazon and Google. Expect the chancellor to seize the opportunity with more money for HMRC to thwart tax-avoiding multinationals.
• Welfare cuts. There had been talk of a freeze in welfare payments, but we're now expecting them to simply rise by less than the rate of inflation, perhaps 1%.
Here's a few links to round-ups: