Kwasi Kwarteng told to publish OBR forecast alongside mini-Budget

·Business Reporter, Yahoo Finance UK
·2-min read
Chancellor of the Exchequer Kwasi Kwarteng walks outside Number 10 Downing Street.
Chancellor Kwasi Kwarteng is expected to announce further energy support and winter tax cuts, as well as a possible reversal of the 1.25% National Insurance increase. Photo: Reuters/Toby Melville

Kwasi Kwarteng has been told by the Treasury Committee to publish an Office for Budget Responsibility (OBR) forecast alongside this month’s emergency budget.

The chancellor received a letter from the department requesting confirmation that if the mini-Budget involves major changes to taxation, it would publish an accompanying OBR forecast, outlining the health of the nation’s finances.

The fiscal event on Friday is set to detail help for households and businesses amid the sharp cost of living crisis sweeping across the country.

He is expected to announce further energy support and winter tax cuts, as well as a possible reversal of the 1.25% National Insurance increase.

Read more: What can we expect from Kwasi Kwarteng's mini-Budget next week

It comes as last month the Treasury Committee asked if the OBR could produce a forecast to be published alongside any emergency budget or significant fiscal event, and whether work had already begun.

In response, the OBR confirmed it began preparatory work on a forecast on 29 July following agreement with the Treasury.

“While the forecast may not be as comprehensive as at previous budgets, the OBR committed to providing the most complete picture of the economic outlook as possible, and to a standard that meets the requirements of the OBR Charter,” Treasury said.

In a separate response, the then chancellor Nadhim Zahawi, stated that, while preparatory work has begun, the decision to set a date for a new forecast is one for the incoming finance minister.

The Treasury usually gives the OBR 10 weeks’ notice of a fiscal event, to enable it to provide an independent forecast of the economy and the UK’s fiscal position.

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Mel Stride MP, chair of the Treasury Committee, said: “We congratulate the new chancellor on his appointment and look forward to a constructive relationship.

“As a committee, we have in the past reported to the House that we consider it very important that significant changes to taxation are announced in a fiscal event alongside an OBR forecast.

“These forecasts are a vital indicator of the health of the nation’s finances, and provide reassurance and confidence to international markets and investors.”

He added: “There has been a deterioration in our economic outlook since the last OBR forecast in March. There have been significant fiscal interventions since then and we are told there will be further significant interventions including major permanent tax cuts to be announced on Friday. Under these circumstances, it is vital that an independent OBR forecast is provided.”

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