Watchdog to unveil forecast for public finances despite cancelled Budget

Support us and go ad-free

Britain’s government spending watchdog has confirmed it will publish a new outlook of the public finances on 7 November despite next week’s Budget being cancelled.

In a letter to the Treasury, the Office for Budget Responsibility (OBR) said it would reassess the state of UK public finances since March due to major changes to the way student loans and pension schemes are accounted for in the figures.

But the 7 November forecasts will only provide its public finance baseline forecasts and will not provide a full economic and fiscal outlook, which would have been published had the 6 November Budget not been scrapped.

The fiscal watchdog also said it would not have enough details to hand on prime minister Boris Johnson’s new Brexit deal to assess if the impact on the public finances will be different to the original deal drawn up under Theresa May.

It comes after official figures recently showed the first September hike in Government borrowing for five years.

Read on...

Support us and go ad-free

Changes to the treatment of student loans – which now assume that many graduates will not be able to replay all their student debts – mean chancellor Sajid Javid is likely to overshoot borrowing targets for this financial year.

Robert Chote, chairman of the OBR, said: “Barring a disruptive ‘no-deal’ Brexit, these are likely to be more significant than any like-for-like revisions when explaining the change from our March public finance forecast to the next one.

“Given the importance of these changes for public understanding of the baseline against which the Government will need to judge its fiscal policy options, we believe that it would be useful to explain publicly the impact that they would have had.”

In March, the OBR forecast public borrowing would rise from a 16-year low of 1.1% of economic output in 2018/19 to 1.3% of GDP or £29.3 billion in 2019/20.

But economists said figures for the year so far – at a revised £39 billion from April to September – signal Javid is on track to miss his aim to keep borrowing below 2% of GDP in 2020-21.

7 November will also see the Bank of England publish its latest economic forecasts in its inflation report, accompanying the interest rate decision.

The Bank has already warned that “entrenched” Brexit uncertainty is hampering economic growth and left the door open to a possible rate cut in the event of this being prolonged if the withdrawal date is delayed yet again.

The OBR must publish two forecasts each financial year, but has yet to publish one in 2019-20.

Mel Stride, the newly appointed chairman of the Treasury Select Committee, said Javid should “set out whether the OBR’s new analysis will contribute to their statutory duty to publish two forecasts each fiscal year”.

“If not, he should set out how he will support the OBR in publishing two forecasts in the remaining 22 weeks of the current fiscal year,” he added.

Support us and go ad-free

We need your help to keep speaking the truth

Every story that you have come to us with; each injustice you have asked us to investigate; every campaign we have fought; each of your unheard voices we amplified; we do this for you. We are making a difference on your behalf.

Our fight is your fight. You’ve supported our collective struggle every time you gave us a like; and every time you shared our work across social media. Now we need you to support us with a monthly donation.

We have published nearly 2,000 articles and over 50 films in 2021. And we want to do this and more in 2022 but we don’t have enough money to go on at this pace. So, if you value our work and want us to continue then please join us and be part of The Canary family.

In return, you get:

* Advert free reading experience
* Quarterly group video call with the Editor-in-Chief
* Behind the scenes monthly e-newsletter
* 20% discount in our shop

Almost all of our spending goes to the people who make The Canary’s content. So your contribution directly supports our writers and enables us to continue to do what we do: speaking truth, powered by you. We have weathered many attempts to shut us down and silence our vital opposition to an increasingly fascist government and right-wing mainstream media.

With your help we can continue:

* Holding political and state power to account
* Advocating for the people the system marginalises
* Being a media outlet that upholds the highest standards
* Campaigning on the issues others won’t
* Putting your lives central to everything we do

We are a drop of truth in an ocean of deceit. But we can’t do this without your support. So please, can you help us continue the fight?

The Canary Support us