Why OBR forecast is being held back until Kwarteng’s next fiscal plan
The message the government wanted to get out was clear. After less than a month as prime minister, Liz Truss had converted from vocal scourge of Treasury orthodoxy to an active supporter.
Given the fallout in financial markets after the not-so-mini-budget, Truss and her chancellor laid on a heavily stage-managed meeting on Friday with officials from the Office for Budget Responsibility, the Treasury’s independent economic forecaster, to try to smooth over the mess.
A week ago the watchdog, responsible for crunching the numbers on the government’s tax and spending plans, had been sidelined as Kwarteng set out £45bn of unfunded tax giveaways. Now the OBR’s chair, Richard Hughes, was the guest of honour in an oak-panelled Downing Street meeting room.
Meetings between the Treasury and the OBR are normal. But holding one directly with the prime minister and chancellor, and with a press photographer and public statement in tow, is unheard of.
The Treasury said it would publish the watchdog’s forecasts for the UK economy and public finances on 23 November, when Kwarteng plans to outline a medium-term fiscal plan. It also said the prime minister and chancellor “reaffirmed their commitment to the independent OBR and made clear that they value its scrutiny”.
Headlines in friendly newspapers had suggested Truss was “not for turning” back on her economic plan. But here was an embarrassing, partial retreat in the war on the woke-ish Whitehall blob. Treasury orthodoxy is dead, long live Treasury orthodoxy!
City investors say there are two big reasons financial markets fell out of bed in the past week, alongside the global factors hitting the pound and government bonds.
First, and most importantly, the shock scale of Kwarteng’s unfunded tax
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