Treasury Committee Launches Inquiry into Office for Budget Responsibility After Forecasting Controversy
The Treasury Committee has launched an inquiry into the Office for Budget Responsibility (OBR), examining its first 15 years and considering reforms to its remit. This move follows scrutiny over the OBR's influence and the resignation of its chair, Richard Hughes, after an error that resulted in the publication of a key forecast ahead of Chancellor Rachel Reeves's Budget speech.
Committee chair Dame Meg Hillier emphasized that the inquiry aims to have an honest conversation about the OBR's strengths and areas for improvement, not to scapegoat the institution. The OBR's functions include producing economic forecasts, assessing policy costs, and ensuring the chancellor is on track to meet self-imposed fiscal rules. However, concerns have been raised about its influence on tax and spending decisions.
Prior to the Budget, the OBR downgraded its forecast on productivity, which was later offset by higher tax receipts. Chancellor Reeves denied misleading the public, amidst economists debating the implications of the figures. Senior OBR figure Professor David Miles stated that the chancellor's comments were consistent with the situation and noted the OBR had expressed concerns about leaks.
Reeves admitted that unauthorized leaks occurred before the Budget, prompting the Treasury to begin a separate inquiry. The Treasury Committee's investigation will assess how effectively the OBR communicates forecasts, its influence on Treasury forecasting processes, and whether changes are needed to its structure, resources, or remit. Established in 2010 to provide independent analysis, the OBR publishes its report on Budget day alongside the chancellor's announcements.
