What the Office for Budget Responsibility’s charts tell us about the UK economy

The Office for Budget Responsibility warns that rising energy costs are reverberating across the economy, pushing up prices, eroding household living standards and weighing on growth, as illustrated in four key charts.

The Office for Budget Responsibility (OBR) has set out a concise visual summary of the UK’s economic outlook, showing how a sustained rise in energy prices is feeding through into wider economic indicators. In a set of four charts, the watchdog connects the recent surge in energy costs to higher consumer prices, falling real incomes and a weaker growth trajectory.

Energy prices and inflation

One chart traces the path of wholesale energy prices and how those increases are transmitted into consumer energy bills and broader inflation measures. The OBR’s visuals underline the direct channel from rising global energy costs to household and business bills, and the consequent upward pressure on consumer price inflation.

Living standards under pressure

A second chart focuses on living standards, illustrating how faster price growth reduces household purchasing power. The OBR highlights that when energy and other essentials become more expensive, real incomes — incomes adjusted for inflation — are squeezed, leaving many households with less discretionary spending power.

Growth outlook

The third chart links those same forces to the growth outlook. Higher energy costs that raise inflation and depress real incomes also act as a brake on overall economic activity, the OBR’s analysis suggests. Slower consumer spending and increased operating costs for firms are among the channels through which the economy’s expansion is likely to be restrained.

Interconnected risks and policy implications

Taken together, the four charts present a compact picture: energy price shocks do not stay confined to the energy sector but spread to prices, living standards and growth. The OBR’s visual summary is intended to help policymakers and the public gauge the scale of those knock-on effects and the trade-offs involved in responses to the shock.

The charts offer a framework for understanding near-term risks rather than precise forecasts; they underscore how external commodity price movements can quickly reshape domestic economic conditions and public debate about policy priorities.