Fiscal watchdog to give initial forecast on mini-budget after meeting with PM and chancellor
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by 0 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 government confirmed that publication of the forecast would not be brought forward from 23 November – more than seven weeks away.
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 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 government said the meeting was “usual”, but it is highly uncommon for a prime minister to attend an OBR meeting, which is normally held between the watchdog and the chancellor to discuss upcoming economic forecasts.
A statement from Downing Street said: “This morning the prime minister Liz Truss and Chancellor Kwasi Kwarteng met with the OBR’s Budget Responsibility Committee, including the Chair Richard Hughes, at Number 10 Downing Street.
“They discussed the process for the upcoming economic and fiscal forecast, which will be published on 23 November, and the economic and fiscal outlook.”
Mr Hughes confirmed the watchdog’s timetable after the meeting.
Speaking outside Downing Street, Mr Hughes said: “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.”
An OBR 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.”
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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.
