OBR “review” is rated e.g. Truss and Kwarteng as given expected release date
The government will “work closely” with the Office for Budget Responsibility (OBR) in the coming weeks after a key meeting between the Prime Minister, the Chancellor and officials from the independent spending watchdog.
The unusual encounter between Liz Truss, Kwasi Kwarteng and the OBR, which appeared to last less than 50 minutes, took place amid market turmoil after last week’s mini-budget.
A Treasury reading following the meeting said a much-awaited OBR forecast will be released on November 23, when the Chancellor is due to reveal his medium-term budget plan.
The confirmation suggests the government is considering ignoring pleas from some Tory MPs to bring forward the release of the OBR forecast in a bid to reassure markets.
Richard Hughes, Andy King and Professor David Miles CBE – all members of the OBR’s Budget Responsibility Committee – arrived for the meeting at 11 Downing Street at 9.45am on Friday.
“They discussed the process for the upcoming economic and fiscal forecasts, which will be released on November 23, and the economic and fiscal outlook,” the Treasury statement said.
“They agreed, as usual, to work closely together throughout the forecasting process and beyond.
“The Prime Minister and Chancellor have reaffirmed their commitment to the independent OBR and have made it clear that they appreciate its review.”
Such meetings, while important for economic planning, rarely attract the kind of attention that Friday’s meeting received.
The government has been engulfed in an economic and political storm and has spent the days since the Chancellor’s mini-budget trying to win back the trust of markets and voters, many of whom, according to polls, were deeply unhappy after the announcement from last Friday. .
Among the concerns facing households is the imminent possibility that thousands of pounds will be added to mortgage bills as the Bank of England is forced to raise interest rates to support the pound.
For many Tory MPs skeptical of the economic and political wisdom behind Ms Truss’ plan, the meeting with the OBR provided another opportunity to reassure markets and rethink some of the policies announced at the tax event, after the £45 billion tax. The package cut plunged the pound to historic lows and forced the Bank of England to intervene to calm the markets.
In a statement released shortly after the meeting, the OBR said it would provide an initial forecast – which “will, as always, be based on our independent judgment on the economic and fiscal outlook and the impact of government policies” – to the Chancellor on October 7.
He said he would set the full schedule until November 23 next week.
Treasury Minister Andrew Griffith had played down the significance of the meeting, telling Sky News: ‘It seems to me a very good idea for the Prime Minister and the Chancellor to sit down with the independent OBR. of independent England, they have a very important role to play.
“We all want forecasts to be as fast as possible, but also as a former CFO, I also know you want them to have the right level of detail.”
It followed calls from the Treasury select committee, chaired by Tory MP Mel Stride, which had urged Mr Kwarteng to reveal his medium-term budget plan at the end of October, while also asking for the OBR forecast to be brought forward for reassure the markets.
The government seems to be ignoring these calls, confirming that the economic and budgetary forecasts will be published on November 23.
Such a move is unlikely to put some of the most worried Tory MPs at ease, after a YouGov poll for The Times showed Labor had opened up a 33-point lead over the Tories, raising new questions about Ms Truss’s leadership weeks into labor and days before the Conservative Party conference in Birmingham.
Sir Charles Walker, a Tory MP commenting on the poll, told Times Radio on Friday: ‘It’s hard to build an argument now that the Tories can win this general election.
The Prime Minister and Chancellor’s latest public comments on Thursday maintained the pair are still economically committed, arguing that their £45billion package of tax cuts is the “right plan” for the economy.
Questions about the absence of a forecast from the OBR to accompany the mini-budget have plagued the Prime Minister and the Chancellor almost since they took office.
Further details emerged on Thursday after the watchdog said it had prepared a draft forecast for the new chancellor on his first day in office.
In a letter to the leader of the Scottish National Party in Westminster, Ian Blackford, and the party’s shadow chancellor, Alison Thewliss, Mr Hughes said the body had sent “a draft economic and fiscal forecast to the new Chancellor on September 6, his first day in office.
He wrote: “We proposed, at the time, to update this forecast to take into account subsequent data and to reflect the economic and fiscal impact of any policies announced by the government in time for them to be published. along with the “tax event”.
He said the OBR had not been tasked with producing an updated forecast, but would have been “able to do so to a standard that satisfies the statutory requirements of the Fiscal Responsibility Charter”.
The details drew fresh criticism from opposition parties, but on Friday Mr Griffith appeared to stick to the government’s assertion that there was not enough time to produce a forecast sufficiently detailed.
“This forecast would not have had the growth measures in this plan. They were being finalized in the hours leading up to the chancellor’s dismissal,’ he told Sky News.
Labor has attacked the government over market chaos, with shadow business secretary Jonathan Reynolds saying people and businesses are looking at the government’s ‘whole approach’ and ‘saying, ‘We have no confidence in these institutions”.
The Liberal Democrats also accused ministers of ‘letting the economy fly blind for two months’.
In a sign of some of the concerns within the Conservative Party, Tory MP Peter Aldous used an article for the Politics Home website to warn that ‘time is running out to show the British people that the Conservative Party deserves to retain the honor of serving of their government.