The UK's fiscal watchdog, the Office for Budget Responsibility (OBR), formally complained to the Treasury about a series of damaging budget leaks that spread "misconceptions" about its forecasts, a senior official has revealed.
Watchdog's Frustration Over 'Unhelpful' Press Briefings
Professor David Miles, a member of the OBR's budget responsibility committee, told the Treasury Select Committee that the watchdog raised concerns with senior officials before Chancellor Rachel Reeves delivered her budget statement last week. He stated there was "lots of information appearing in the press which perhaps wouldn't normally be out there" and that this was not "particularly helpful" from the OBR's perspective.
Miles explained that the OBR felt compelled to publish an unusual public letter to correct false impressions, which it believed were "damaging to the OBR and to the process". This move came just before OBR Chair Richard Hughes resigned, taking responsibility for the inadvertent early release of budget documents.
Correcting Key Fiscal Misconceptions
Miles highlighted two specific false narratives that required correction. The first was the idea that the OBR had shifted its assessment period for government bond yields under government pressure. The second major misconception was that its forecasts had "wildly fluctuated" at the last minute, creating chaos for Labour's budget planning.
He directly contradicted a government briefing from 14 November, which suggested improved forecasts had allowed Reeves to drop income tax rise plans. "There seemed to be a misconception that there seemed to have been some good news, and I'm not sure where that came from: it didn't exist," Miles told MPs. He clarified that forecast headroom had only "gradually improved a little bit" ahead of the final pre-measures forecast on 31 October.
Potential Economic Impact and Defence of Timing
The OBR official suggested the flurry of contradictory leaks may have negatively impacted economic growth by amplifying uncertainty for consumers and businesses. "It may well have been exacerbated by leaks which some days seemed to be suggesting one thing and the next day something different. I don't think that can have helped," he stated.
Miles also defended the OBR's decision to revise down its underlying productivity forecasts this summer, a move that frustrated Reeves and Prime Minister Keir Starmer. He argued it was crucial to wait for the economic shocks of Covid and the Ukraine war to fade, and acting earlier would have been "trigger happy".
Despite the controversies, Miles denied that the OBR's letter proved Chancellor Reeves was misleading in her pre-budget speech on 4 November. He maintained the fiscal outlook was never "problem free", describing the headroom against her fiscal rules as merely a "sliver".
