Fiscal watchdog to give initial forecast on mini-budget after meeting with PM and chancellor

Liz Truss and Kwasi Kwarteng have met the head of the UK’s independent fiscal watchdog amid the fallout from the government’s mini-budget.

The Office for Budget Responsibility (OBR) confirmed it would deliver an initial forecast to the chancellor next week, which “will, as always, be based on our independent judgment about economic and fiscal prospects and the impact of the government’s policies”.

The OBR released a statement saying a full forecast would not be published for seven weeks, on 23 November.

The talks with the OBR came at the end of a week of economic turmoil in which the pound plunged, nearly half of mortgages were pulled and pension funds were saved from collapse.

The Treasury has denied that this is an emergency measure, but it is highly unusual for a prime minister to attend an OBR meeting, which are usually held between the watchdog and the chancellor to discuss upcoming economic forecasts.

Richard Hughes, chairman of the Office for Budget Responsibility, confirmed the timetable after meeting the prime minister and the chancellor in Downing Street.

Speaking outside Downing Street, Mr Hughes said: “We saw the prime minister and chancellor. We talked to them about the economic and fiscal outlook.

“We are going to be providing the chancellor with an update next Friday, and we will set up a timetable for our forecast process next week.”

A statement added: “We will deliver the first iteration of that forecast to the Chancellor on Friday 7 October and will set out the full timetable up to 23 November next week.

“The forecast will, as always, be based on our independent judgment about economic and fiscal prospects and the impact of the Government’s policies.”

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The meeting came after criticism that an OBR forecast was not published alongside the chancellor’s mini-budget last week.

The OBR has a statutory requirement to provide two forecasts a year, and said it offered Mr Kwarteng one on his first day as chancellor.

The chancellor did not commission one, and the lack of analysis on the measures outlined in his financial statement is thought to have contributed to the turmoil in the markets in the past week.

The OBR was set up by the government in 2010 to provide independent analyses of the UK’s public finances.

Andrew Griffith, the financial secretary to the Treasury, told Sky News on Friday morning that it was a “very good idea” for Ms Truss and Mr Kwarteng to meet with the OBR.

Sir Charles Bean, a former deputy governor of the Bank of England, said such a summit is “quite unusual”.

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Sir Charles said that meetings with the chancellor and OBR officials are not uncommon, but the prime minister less frequently talks with the watchdog.

He also said the meeting was like “closing the stable door after the horse had bolted”, as the OBR forecast needed to be released with the mini-budget to reassure markets.