Update nowcasting methodology documentation with RF comparison

[MaxGhenis]

Summary

This is a follow-up to #1171. The Resolution Foundation's Living Standards Outlook and budget preview reports detail their nowcasting methodology. We should document how PolicyEngine's approach differs.

RF Methodology (from Living Standards Outlook 2025 appendix)

Earnings Growth

• Model wage floor ensuring no-one below age-appropriate minimum wage
• Include spillover effects for those just above wage floor
• Model NLW extension to 21-22 year olds (2024-25) and provisionally 18-20 (2029-30)
• Employee and self-employed earnings uprated equally
• Constrained to ONS (outturn) and Bank of England/OBR (projection) figures

Housing Costs

• Use ONS Price Index of Private Rents (PIPR) for rent inflation
• Separate treatment for social vs private rents

Benefits

• Use UC statistics for current beneficiary counts
• Model take-up rates based on historical data

PolicyEngine Approach

Document our current methodology for:

• Earnings uprating
• Housing cost projection
• Benefit take-up assumptions
• Inflation indices used

Key Differences to Document

1. Does PE use the same ONS/BoE/OBR data sources?
2. How does PE handle minimum wage spillover?
3. What take-up rates does PE assume?
4. How does PE project housing costs?

Related Issues

• Add page to documentation on differences between our nowcasting and RF's nowcasting #1171 - Original nowcasting documentation issue
• Add RF methodology for earnings growth #1179 - RF earnings growth methodology

Source

• Living Standards Outlook 2025 (Appendix)
• Black holes and consolidations

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