Mini-budget: PM to meet head of OBR following market turmoilon September 29, 2022 at 8:46 pm

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Liz Truss and the Chancellor Kwasi Kwarteng will meet the independent forecaster the OBR on Friday.

Liz Truss walks outside Downing Street in London, September 23Image source, Reuters

The prime minister will meet the head of Britain’s independent forecaster on Friday after days of market turmoil.

In an unusual move, Liz Truss and Chancellor Kwasi Kwarteng will meet the head of Office of Budget Responsibility’s (OBR) to discuss the fallout after Friday’s mini-budget.

The OBR said it offered to prepare a draft forecast in time for the mini-budget but it was not taken up.

A group of MPs has called for the forecast to be released “immediately”.

The Treasury Select Committee said the lack of this had “in some part driven the lack of confidence in the markets”.

News of the meeting with OBR chair Richard Hughes came as a poll gives Labour a 33 percentage point lead over the Tories.

On Thursday, Prime Minister Liz Truss and her Chancellor Kwasi Kwarteng spent the day defending their policy after a dramatic week that saw the pound slump against the dollar and the Bank of England forced to step in and take action.

Forecasts of the UK’s economic outlook by the independent OBR are usually published when the government makes major financial announcements, for example on Budget day.

In the letter, Conservative MP Mel Stride – who chairs the cross-party Treasury Select Committee – said the financial impact of the mini-budget is larger than a typical Budget, but there had been no assessment by the OBR to go with it.

Mr Stride said the lack of an OBR forecast had left some people with the impression the government is trying to avoid scrutiny.

He said the next OBR forecast should be brought forward, and that the chancellor’s next planned financial statement on 23 November should also be moved forward “to as early a date as possible”, given “the continued uncertainty within markets”.

The OBR publicly confirmed on Thursday that it had sent Chancellor Kwasi Kwarteng a forecast when he took office – and also offered to update it in line with any planned government announcements but was not commissioned to do so.

The intervention from the committee comes after Prime Minister Liz Truss spoke to a number of BBC outlets this morning, which saw her insist the tax cuts outlined in the mini-budget were the “right plan”.

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Forecasts from the independent OBR give an indication of the health of the nation’s finances and there have been calls for a forecast to be published in the last week.

Following last week’s mini-budget the SNP’s leader in Westminster, Ian Blackford, sent a letter to the OBR calling for “a full, updated forecast” to be released.

Meanwhile, the chancellor has sent a defence of his policies to Conservative MPs.

He said his mini-budget was needed to stop a collapse in consumer spending – and that he was working at pace to show markets he had a “clear plan”.

Mr Kwarteng sought to reassure MPs, pledging that reforms “on childcare, business regulations, financial services, agriculture and more” would be set out in the next six weeks.

The message on WhatsApp contained a list of “talking points” to defend the government’s handling of the economy, including the need to emphasise that the economy was already in decline and the “government needed to act urgently”.

Since it was announced at the end of last week the mini-budget has faced widespread criticism, with the International Monetary Fund and former Bank of England governor Mark Carney disparaging the plan.

On Tuesday the Bank of England said it would buy up to £65bn worth of government bonds to prevent the collapse of some pension funds.

Across all polls Labour have opened up an average 19.5% lead over the Conservatives since Ms Truss became prime minister three weeks ago.

A new poll, by YouGov for The Times and carried out on Wednesday, found Labour had a 33-point lead.

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