Read the national living wage forecast from OBR Table 1.13

changelog.d/2721.added.md

@@ -0,0 +1 @@
+The OBR forecasts importer now writes national living wage growth from the EFO economy tables' national living wage table (Table 1.13). It reads the OBR's levels across the table's row of years, projects each estimate from the last national living wage rate in the minimum wage parameters as the model does, and writes growth that keeps each estimate's penny.

policyengine_uk/parameters/gov/economic_assumptions/README.md

@@ -67,16 +67,56 @@ for each duty's rates, the higher-stake share Machine Games Duty's rate
 assumes, and the approximations.
 
 `national_living_wage` projects the minimum wage rates
-(`gov.hmrc.minimum_wage`) after the last rate set. It is the growth of the
-rates set to 2027, then the OBR's estimates in Table 1.13 of the detailed
-economy tables, then `average_earnings`' long-run growth. The checked-in
-estimates are the October 2026 EFO's, ahead of the other series' March 2026
-vintage, because HM Treasury costed Budget 2026's Carer's Allowance taper on
-them. `utils/import_obr_forecasts.py` doesn't read Table 1.13, so the series
-is updated by hand with each EFO. `test_minimum_wage_projection.py` holds the
-table and fails if the series stops reproducing it, or if its long-run years
-stop matching `average_earnings`. Each rate is set by an S.I., so this is a projection, not
-a formula.
+(`gov.hmrc.minimum_wage`) after the last rate set. The government sets each
+rate following the Low Pay Commission's recommendations, and the OBR
+publishes the rates the government has set, with its estimates of later
+ones, in the national living wage table of the detailed economy tables
+(Table 1.13 in October 2026). The series holds the growth into each of those
+rates, then `average_earnings`' long-run growth, year for year. HM Treasury
+costed Budget 2026's Carer's Allowance taper on the OBR's estimates.
+
+`utils/import_obr_forecasts.py` writes the series with the other economy
+series. It finds the table by its title and reads the level under each year
+across the table's one row of years. The importer divides each year's level
+by the previous year's level, subtracts one, and rounds to six decimals. The
+OBR identifies in its note the last year the government has set, and the
+importer labels the growth into those years and into the OBR's estimates with
+separate comments.
+
+The model projects the national living wage from the last rate in the last
+bracket of `gov/hmrc/minimum_wage/non_apprentice.yaml`. It carries that rate
+through the index it builds from this series and rounds each projected rate
+to the nearest penny. The importer reads that rate through policyengine-core's
+loader and Parameter, then projects each later table year with the model's
+rounding. Where a year's ratio would leave the model a penny off the
+OBR's level, the importer writes the six-decimal growth that keeps the OBR's
+penny. Where the OBR publishes no level for the year of that rate or earlier,
+the importer keeps the series' earlier growth into the table's first year and
+checks the model's penny there against the OBR's. The importer
+then runs the model's own generation steps on the file it would write. It
+checks that the model's index reaches the table's last year, stays above zero
+and finite in every year the model builds it, and matches the index the
+importer compounded.
+
+The importer stops before writing any file when:
+
+- the unit differs from £ per hour, or the table lacks one row of years or
+  one row labelled "National Living Wage (NLW)";
+- the years skip or repeat, a year lacks a positive level, or a figure has no
+  year above it;
+- the OBR's note names no single calendar year the government has set, or its
+  statements name different years;
+- the OBR's level in the year of the file's last rate differs from that rate
+  at the penny;
+- the OBR publishes no level for the year of that rate or earlier, and the
+  model carries the rate to another penny in the table's first year;
+- the model's index, built from the series the importer would write, reaches
+  zero or infinity in a year the model builds it; or
+- no six-decimal growth keeps an estimate's penny.
+
+`test_minimum_wage_projection.py` holds the October 2026 table, checks it
+against the importer's fixture, and fails if the series stops reproducing the
+table to the penny, or if its long-run years stop matching `average_earnings`.
 
 ## Time horizons
 
@@ -489,9 +529,17 @@ the forecast levels, though not their growth.
    EFO's policy tables for any new measure in the betting and gaming lines.
    Then update the published levels in
    `policyengine_uk/tests/test_gambling_duty_base_projection.py`.
-7. If the new EFO runs past `PROJECTION_END_YEAR`, move it on (see
+7. The importer refreshes `national_living_wage` in the same run, from the
+   new economy tables' national living wage table (Table 1.13 in October
+   2026), with `average_earnings` after it. Then replace the cut-down table in
+   `policyengine_uk/tests/fixtures/obr_economy/` (see its README) and the
+   levels in `OBR_NATIONAL_LIVING_WAGE` in
+   `policyengine_uk/tests/test_minimum_wage_projection.py`. Pass
+   `--skip-national-living-wage` only to leave the series on the previous
+   EFO.
+8. If the new EFO runs past `PROJECTION_END_YEAR`, move it on (see
    [Dataset projection horizon](#dataset-projection-horizon)).
-8. Refresh the household energy price inputs (see
+9. Refresh the household energy price inputs (see
    [Household energy prices](#household-energy-prices)) from the new EFO's
    economy tables, the MM23 release of the same month and the latest Energy
    Trends tables. The importer records the last quarter ONS publishes in
@@ -544,13 +592,6 @@ Bank Rate (`gov.boe.base_rate`, economy Table 1.9) and households' financial
 assets (`household.wealth.financial_assets`, Table 1.11) also take October
 2026 values.
 
-The national living wage forecast (economy Table 1.13) is not read here. Until
-PolicyEngine/policyengine-uk#2700 adds it as `obr.national_living_wage`, the
-minimum wage rates, and the rules built on them, stay at their April 2026
-levels; #2721 tracks teaching the importer to read the table. Whichever of
-#2700 and the October 2026 update merges second copies the 2032+ earnings path
-into that series.
-
 The EFO refresh does not touch `finance_ni.domestic_rates`; OBR does not
 publish a Northern Ireland domestic rates bill series (see below).
 

policyengine_uk/parameters/gov/economic_assumptions/yoy_growth.yaml

@@ -207,34 +207,36 @@ obr:
 
   national_living_wage:
     description: National living wage year-on-year growth, for the rate from April of each year.
-    # The OBR forecasts the national living wage itself (EFO detailed economy
-    # tables, Table 1.13): rates set to 2027, then "OBR estimates consistent
-    # with the rest of our economy forecast". Each value here is one year's
-    # rate over the year before's, to six decimals, so compounding them from
-    # £13.21 reproduces the table to the penny: £13.51 (2028), £13.85 (2029),
-    # £14.23 (2030) and £14.62 (2031). HM Treasury costed the Budget 2026
-    # Carer's Allowance taper on these "OBR projections for increases in the
-    # National Living Wage" (policy costings, October 2026). After the EFO
-    # horizon the series takes average_earnings' long-run growth: the Low Pay
-    # Commission's reference point for the rate is two-thirds of median
-    # hourly earnings (remit 2026). Refresh 2028 onwards with each EFO.
+    # The OBR forecasts the national living wage itself, in £ an hour, in the
+    # EFO detailed economy tables (Table 1.13 in October 2026): the rates the
+    # Government has set, then "OBR estimates consistent with the rest of our
+    # economy forecast". utils/import_obr_forecasts.py reads the table and
+    # writes each year's rate over the year before's, to six decimals, so
+    # compounding them reproduces the table to the penny. It writes the years
+    # the Government has set and the OBR's estimates under separate comments
+    # below; gov.hmrc.minimum_wage cites the regulations or Budget behind
+    # each rate set. HM Treasury costed the Budget 2026 Carer's Allowance
+    # taper on these "OBR projections for increases in the National Living
+    # Wage" (policy costings, October 2026). After the EFO horizon the
+    # importer copies average_earnings' long-run growth: in its 2026 remit to
+    # the Low Pay Commission, the government says two-thirds of median hourly
+    # earnings "should continue to be the key reference point for future
+    # rates".
     values:
-      # Rates set: S.I. 2021/329 to 2026/357, and £13.21 for 2027 (Budget
-      # 2026, paragraph 6.128), from £8.72 in 2020.
+      # The government set the rates for 2021-2027: £8.72 in 2020 to £13.21 in 2027 (OBR EFO October 2026, economy Table 1.13 "National Living Wage (NLW)")
       2021-01-01: 0.021789
       2022-01-01: 0.066218
       2023-01-01: 0.096842
       2024-01-01: 0.097889
       2025-01-01: 0.067308
-      2026-01-01: 0.040950
+      2026-01-01: 0.04095
       2027-01-01: 0.039339
-      # OBR estimates (2028-2031), EFO October 2026 Table 1.13
+      # The OBR estimates the rates for 2028-2031: £13.21 in 2027 to £14.62 in 2031 (OBR EFO October 2026, economy Table 1.13 "National Living Wage (NLW)")
       2028-01-01: 0.022984
       2029-01-01: 0.025251
       2030-01-01: 0.027289
       2031-01-01: 0.026986
-      # Long run (2032+): average_earnings growth, as refreshed by the
-      # October 2026 EFO (#2717)
+      # After the OBR forecast, the importer copies average_earnings year for year
       2032-01-01: 0.0285
       2033-01-01: 0.0309
       2034-01-01: 0.0334
@@ -281,7 +283,7 @@ obr:
       unit: /1
       label: National living wage growth
       reference:
-        - title: OBR EFO October 2026, detailed forecast tables (economy), Table 1.13
+        - title: OBR EFO October 2026 (detailed forecast tables, economy, Table 1.13)
           href: https://obr.uk/efo/economic-and-fiscal-outlook-october-2026/
         - title: HM Treasury, Budget 2026 policy costings, Carer's Allowance taper (cost base)
           href: https://assets.publishing.service.gov.uk/media/6ae1883fe4367e5c8b0467df/AB26_Policy_Costing.pdf

policyengine_uk/tests/fixtures/obr_economy/README.md

@@ -0,0 +1,23 @@
+# Real OBR economy table fixture
+
+`efo_october_2026_economy_table_1_13.xlsx` holds the Contents and 1.13
+(National Living Wage) worksheets of the OBR October 2026 EFO detailed
+forecast tables, economy
+(`efo-october-2026-detailed-forecast-tables-economy.xlsx` in the detailed
+forecast tables zip file, SHA-256
+`96795d1747bb5a4978c7fb768689d5fd31f568e5223db8a94b1bd92ba7f6c118`). Source:
+<https://obr.uk/efo/economic-and-fiscal-outlook-october-2026/>.
+
+As with the energy price fixtures, a script kept only those worksheets in the
+workbook's sheet list and relationships, dropped its defined names, and copied
+the worksheet XML and shared strings byte for byte. The archive serves the
+importer's XLSX reader and leaves out the styles and other parts a full Excel
+file has.
+
+`policyengine_uk/utils/import_obr_forecasts.py` must reproduce
+`obr.national_living_wage` in `yoy_growth.yaml` from it byte for byte. Tests
+change cells of sheet 1.13 to check that the importer refuses a changed layout
+rather than reading another row. No test downloads a workbook. With each new
+EFO, replace the file with the new table and update `OBR_NATIONAL_LIVING_WAGE`
+in `policyengine_uk/tests/test_minimum_wage_projection.py`, which must equal
+it.